Crude prices sink to $76 per barrel
Oil prices fell to around $76 a barrel Tuesday with new data showing a slow U.S. economic recovery and consumer confidence that remains lukewarm at best, AP reported.
The dollar also gained against other major currencies, which can keep energy prices in check.
Benchmark crude for December delivery fell $1.54 to settle at $76.02 a barrel on the New York Mercantile Exchange.
The Commerce Department said the economy grew at a rate of 2.8 percent between July and September, short of estimates for 3.5 percent growth released just a month ago. Consumers are not spending much, commercial construction was weak, businesses trimmed inventories.
The lack of consumer spending was partly explained in another report released Tuesday.
Americans' confidence in the economy improved slightly in November from October, but shoppers remain gloomy heading into the holiday shopping season, according to the monthly survey released by the Conference Board.
The lack of industrial and consumer activity has played out in weekly oil inventory reports from the Energy Department, with supplies of crude in storage growing.
The next weekly report arrives Wednesday, and expectations are that crude and gasoline supplies grew again last week.
Retail prices edged lower again, falling less than a penny to $2.638 per gallon Tuesday. That's a lot more than last year at this time, when gasoline prices plunged to about $1.91 as the economic crisis unfolded.
Gasoline consumption for the week ended Friday declined 1.6 percent from the previous week and 1.4 percent from a year ago, according to the weekly MasterCard SpendingPulse report.
Year-to-date consumption for 2009, however, is still up 0.6 percent.
MasterCard's report is based on aggregate sales activity in the MasterCard payments network, coupled with estimates for all other payment forms, including cash and check.
Still, gasoline prices are being supported by crude, which has traded between $76 and $82 for more than a month.
That is largely being blamed on the dollar because oil is bought and sold in the U.S. currency. Investors holding euros or other currencies can buy more oil when the dollar falls.
Crude prices rose Monday when the dollar fell. On Tuesday, the dollar gained against the euro, yen, and British pound. Oil prices fell as much as 2 percent.
In other Nymex trading, heating oil fell less than a penny to settle at $1.9497 a gallon. Gasoline for December delivery fell almost 4.04 cents to settle at $1.939 a gallon. Natural gas for December delivery rose 1.3 cents to settle at $4.486 per 1,000 cubic feet.
In London, Brent crude dropped $1 to settle at $76.46 on the ICE Futures exchange.