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Oil falls below $94 per barrel after leaders disagree on how to use IMF to help Europe
NEW YORK (AP) ' Oil prices slipped Friday after world leaders disagreed on further steps to deal with the European financial crisis.
Benchmark crude fell 40 cents to $93.67 per barrel in New York, while Brent crude rose 30 cents to $111.13 a barrel in London.
Prices fell after leaders of the world's 20 most powerful economies, meeting in Cannes, France, failed to find ways to strengthen the International Monetary Fund. The IMF is expected to be the lender of last resort for Greece and other European nations.
Greece is battling massive government debts, and investors fear a default could lead to bank failures across the continent. European leaders are trying to keep Greece's financial troubles from destabilizing the eurozone, but it's unclear whether Greece will follow through with a debt reduction plan that was hammered out last month.
Analysts expect eurozone businesses to spend less and the European economy to slow. That will not only cut energy consumption in Europe, it'll shrink energy demand in China and other nations that export consumer goods. "If their economy is in a shambles, then Chinese manufacturing is going to be hit," PFGBest analyst Phil Flynn said. "And that really affects oil demand."
China, the world's second-largest oil consumer behind the U.S., is expected to drive world oil demand growth in coming years.
Meanwhile there was some encouraging news in the U.S., where the economy added 80,000 jobs in October and the unemployment rate fell to 9 percent.
Gasoline was down less than a penny on Friday to a national average of $3.42 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 2 cents higher than it was last month, and it's around 61 cents more than a year ago.
In other energy trading, heating oil rose 3 cents to $3.0633 per gallon, and gasoline futures rose 2 cents to $2.6590 per gallon. Natural gas rose 5 cents to $3.83 per 1,000 cubic feet.