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European debt concerns push oil prices lower; pump prices dropped over weekend
NEW YORK (AP) ' The price of oil dropped Monday on fresh concerns about Europe's economy.
Benchmark West Texas Intermediate crude gave up 77 cents to end at $103.11 per barrel in New York. Brent crude, which sets the price for oil imported into the U.S., lost 5 cents to finish at $118.71 per barrel in London.
Prices declined after the European Union reported that government debts have risen despite aggressive attempts to slash spending. Separately, a survey of the euro zone's manufacturing and services sectors unexpectedly fell in April.
This can have ripple effects in the global economy. It could cut sales for companies that export to Europe, and it may make it tougher for international banks to lend money. Industrial production in China, a major exporter to Europe, slowed down in March, and it appears to be falling again this month, according to preliminary data released Monday by HSBC, a London-based investment firm.
In the U.S., retail gasoline prices fell 2.3 cents over the weekend to $3.86 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. The price of gasoline in the U.S. has dropped by nearly 8 cents per gallon since the first week of April following a decline in oil prices and gasoline consumption.
Gasoline, on average, now costs about as much as it did a year ago.
Analysts say gasoline should get even cheaper in coming weeks. Futures prices, which are quickly reflected at the pump, have been falling this month. Government data show that money managers, hedge funds, pension funds and other institutional investors have been pulling back on bets that gasoline prices would rise.
"They're taking money off the table," independent analyst and trader Stephen Schork said of gasoline investors. "So prices appear to be headed lower."
Gasoline futures added 4.46 cents to end at $3.1873 per gallon, but they're still down nearly 7 percent from their peak in March.
In other energy trading, heating oil added less than a penny to finish at $3.1398 per gallon and natural gas futures added 8 cents to end at $2.007 per 1,000 cubic feet.
Follow Chris Kahn on Twitter at http://twitter.com/ChrisKahnAP