Oil price drops near $86; gas prices down again
October 23, 2012 1:14PM
Updated: October 23, 2012 1:42PM
The price of oil fell to a three-month low as big corporations cut earnings forecasts, raising concerns about economic growth and oil demand.
Benchmark oil dropped $2.32, or 2.6 percent, to $86.29 in afternoon trading in New York. It’s lost about 6 percent in the past three trading sessions.
That’s starting to mean more relief at the gas pump for U.S. drivers. The national average for a gallon of regular gasoline dropped 2 cents overnight to $3.65. The price has fallen 17 cents in the past 12 days.
Gas prices tend to fall at this time of year. Refiners make a cheaper blend of gasoline for the cooler months, and people drive fewer miles. This year, tepid economic growth means the chance of slower than normal demand. That’s why gasoline futures have plunged 12 percent in less than two weeks, including a 6-cent drop Tuesday to $2.59 per gallon.
That could mean a few more dollars in consumers’ pockets by the holidays. AAA predicted Monday that the average price of gas should be down to between $3.25 and $3.40 by Thanksgiving. The average was $3.32 a gallon on Thanksgiving last year.
Oil has plunged as jitters on Wall Street have migrated to the energy markets. 3M Co., with products ranging from Scotch tape to traffic sign coatings, and Posco, the big Korean steel maker, were among the major companies on Tuesday that cut forecasts because of weak economic growth in China and Europe. Caterpillar Inc., the big machinery company, did the same on Monday. That gloominess has sent most global stock markets sharply lower.
Brent crude fell $1.64, or 1.5 percent, to $107.79 in London.
In other futures trading in New York:
— Heating oil fell 4 cents to end $3.03 per gallon.
— Natural gas broke the trend, rising 8 cents to $3.53 per 1,000 cubic feet after falling sharply Monday.