NEW YORK (AP) — The price of oil fell 2 percent Tuesday, extending a weeklong decline, as signs of global economic weakness raised concerns about energy demand.
Oil has fallen every day since May 1. The price of benchmark U.S. crude has dropped by 6.7 percent in that time, while Brent crude has declined 5.4 percent.
On Tuesday, benchmark U.S. crude lost $1.94, or 2 percent, to $96 per barrel in New York. Brent crude lost $1.88, or 1.7 percent, to $111.28 per barrel in London.
Prices have declined on disappointing jobs numbers in the U.S. and recent elections in France and Greece that resulted in uncertainties about Europe's efforts to solve its debt crisis.
And Saudi Arabia, the world's largest oil exporter, has been increasing production in an effort to rein in this year's oil price rise. The Saudis will lose money as oil prices fall, but its oil ministers are more concerned with keeping the global economy from falling back into recession. A recession could force oil prices to plummet, as they did at the end of 2008, which would be much more devastating for the Saudis and other oil producers.
Increased Saudi supplies mixed with growing concerns about the world economy should push oil prices lower in coming months, said Michael Lynch, president of Strategic Energy & Economic Research. Lynch expects benchmark crude to drop to $90 per barrel by Labor Day.
Gasoline prices are falling as well. The national average has dropped by 17.2 cents per gallon since early April, hitting $3.76 per gallon on Tuesday. A gallon of regular is about 20 cents cheaper than it was the same time last year, according to AAA, Wright Express and Oil Price Information Service.
The Energy Department's Energy Information Administration cut its forecast for gasoline prices in its short term energy outlook. EIA expects regular gasoline retail price for the April-through-September summer driving season to average $3.79 per gallon, 16 cents per gallon below the level in its previous outlook a month ago. EIA thinks gasoline will average $3.71 per gallon this year and $3.67 per gallon in 2013.
In other energy futures trading, heating oil lost 2 cents to $2.95 per gallon and gasoline fell by 2 cents to $2.9509 per gallon. Natural gas lost 3.5 cents to $2.301 per 1,000 cubic feet.
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