Reply #3: Oil falls sharply on economy worries [View All]

[ozymandius]

NEW YORK - Oil futures dropped sharply Tuesday as a dismal retail sales report confirmed a growing view among investors that the economy is slowing and that demand for energy is likely to fall.

Investors who have already been selling heavily on concerns about a weak economy dumped contracts again after the Commerce Department said retail sales fell by 0.4 percent in December. Not only was the drop much worse than the 0.1 percent analysts expected, it also was evidence that not even the holiday shopping season could encourage wary consumers to spend freely.

Light, sweet crude for February delivery fell $2.30 to settle at $91.90 a barrel on the New York Mercantile Exchange.
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Expectations that the Energy Department's weekly inventory report will show supplies of crude oil and refined products rose last week also weighed on futures prices.

At the pump, meanwhile, gas prices fell 0.9 cent overnight to a national average of $3.061 a gallon, according to AAA and the Oil Price Information Service. Gas prices have fallen lately after following oil prices' rise to a record $100.09 a barrel two weeks ago. But retail gas prices remain nearly 83 cents higher than they were one year ago.

http://news.yahoo.com/s/ap/oil_prices