Oil drops on more signs of economic trouble
NEW YORK (AP) — The price of oil is falling on more signs of trouble for the global economy.
The Labor Department said Friday that U.S. employers added just 80,000 jobs in June — a disappointing number that shows the economy is still sluggish three years after the recession ended. Meanwhile, borrowing rates for Spain and Italy rose to distressing levels because investors think more needs to be done to resolve Europe's debt crisis.
As the U.S. and European economies struggle to grow, oil demand is expected to be weaker in the second half of the year. The U.S. is the world's biggest oil consumer, and the prospect of less demand tends to push down prices.
The price of benchmark U.S. crude fell by $2.75, or 3.1 percent, to $84.47 a barrel on Friday. Brent crude, which helps set the price of imported crude used to make gasoline, dropped $2.44 to $98.26 a barrel.
At the pump, gasoline prices rose for the fourth straight day, adding 2 cents to a national average of $3.358 per gallon, according to AAA, Wright Express and Oil Price Information Service. Until this week, gasoline had been on a steady decline, losing an average of 61 cents per gallon since the first week of April.
Experts say the national average will likely range between $3.30 and $3.50 per gallon from now until Labor Day.
Natural gas futures fell after the government said the nation's supply grew last week. Natural gas in storage hit an all-time high at the end of last year and has stayed well above average so far this year. The surplus is shrinking, however, as utilities burn more natural gas to generate power. And power demand will grow this summer as homes and businesses crank up their air conditioners with record heat gripping much of the nation.
The price of natural gas fell 11 cents to $2.84 per 1,000 cubic feet in New York. In other futures trading, heating oil fell by 6 cents to $2.71 per gallon and gasoline futures gave up 4 cents to $2.73 per gallon.