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Benchmark oil falls below $105 on global growth concerns, Iran, China; commodities sharply lower
NEW YORK (AP) ' Crude oil prices fell below $105 a barrel Tuesday on concerns about global economic growth and a break in the prolonged tensions over Iran's nuclear program.
Benchmark West Texas Intermediate crude, which is used to price oil produced in the U.S., fell by $2.02 to end the day at $104.70 per barrel on the New York Mercantile Exchange, the lowest price since Feb. 21. In London, Brent crude, which prices foreign oil imported by U.S. refineries, gave up $1.82 to finish at $121.98 per barrel on the ICE Futures Exchange.
Oil prices fell after Iran agreed to let international nuclear inspectors into its facilities. Oil has surged this year as Western powers confronted Iran over its nuclear program and Iran threatened to shut off a strategic waterway for oil tankers. The announcement eased concerns about a possible disruption to oil supplies around the globe.
On Monday, China lowered its official growth target to 7.5 percent from 8 percent, cementing concerns that the Asian exporter ' a bellwether for global economic activity ' will see business slow down.
Metals led a broad decline in commodity prices Tuesday as the prospect of slower global growth deepened concerns about future demand for everything from industrial metals to corn. In addition to metals, prices for energy products, wheat and corn also fell.
The price of gold fell $31.80 per ounce to $1,672.10 per ounce. Silver, platinum and copper all fell more than 2 percent, because of concerns about Europe and weaker economic demand in China.
"Global growth fears now are hitting home, and we're seeing selling across the board," said Matt Zeman, a market analyst for Kingsview Financial.
Crude has risen from $96 last month amid investor concern that a military conflict aimed at destroying Iran's nuclear capabilities would disrupt global oil supplies.
In other energy trading, natural gas futures were flat at 2.356 per 1,000 cubic feet after nearly hitting a 10-year low on Monday. With winter nearly over and warmer weather expected in coming days, oil traders are betting that demand will fall as homeowners and businesses turn down the heat.
Analyst and trader Stephen Schork said natural gas prices could fall back to the 10-year low of $2.32 per 1,000 cubic feet.
"There's just too much supply out there," Schork said.
That should be good news for U.S. homeowners. The Energy Department said residential natural gas prices should fall by nearly 2 percent in 2012.
Heating oil was also flat, at $2.356 per gallon. Gasoline futures lost 2.81 cents to finish at $3.2299 per gallon.
AP Energy Writer Chris Kahn contributed to this report