NEW YORK (AP) — The price of oil dropped to a six-month low Tuesday on concern that economic uncertainty in Europe could hurt demand for crude.
Benchmark West Texas Intermediate crude fell 80 cents to end the day at $93.98 per barrel in New York. Oil hasn't finished this low since Dec. 19.
Oil has fallen 11 percent so far in May. Recent signs of global economic weakness in Europe and elsewhere have raised questions about the strength of energy demand.
Among recent developments:
— In Greece, party leaders again failed to form a government on Tuesday. They disagree about whether to accept more international bailouts and continue with painful spending cuts. This raises the possibility of Greece leaving the European common currency and undermining Europe's already fragile economy. Data released Tuesday show that only growth in Germany kept the eurozone from falling into recession in the first quarter.
— Economic reports in the U.S. have been mixed. On Tuesday, the government said consumers held back a bit on spending last month, even as gas prices declined. That follows reports showing moderating economic growth, a slowdown in the pace of hiring and a decline in gasoline use.
— China, the world's second-largest oil consumer, last week reported a sharp decline in both investment and industrial production growth for April.
Experts have been reining in forecasts for global oil demand in the near-term. At the same time, Saudi Arabia and other oil-rich countries have increased production. That combination has helped put pressure on oil prices.
For Tuesday, the big question was where Europe is headed.
"Investors don't know what to make of Europe," independent analyst and trader Stephen Schork said. "Greece is an absolute mess, and that's translating into a weaker euro."
The euro fell to a four-month low against the dollar Tuesday. A stronger dollar makes oil more expensive for investors trading in other currencies.
In the U.S.,
gasoline prices were flat at $3.727 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded has dropped by nearly 21 cents since topping out at $3.936 in early April.
MasterCard SpendingPulse, which estimated gasoline demand across the country, said Tuesday that U.S. motorists bought less gasoline, on average, for the 60th consecutive week. Its four-week estimate of gasoline consumption dropped by 5.2 percent to 61.1 million barrels.
In other futures trading, heating oil added less than a penny to end at $2.933 per gallon while wholesale gasoline lost 1.49 cents to finish at $2.9441 per gallon. Natural gas rose by 6.9 cents to $2.50 per 1,000 cubic feet.
Brent crude, which is used to set the price of oil imported by U.S. refineries, added 45 cents to finish at $111.45 per barrel in London.
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