Oil Prices Drop
Source: Associated Press, Sandy Shore (9/16/10)
"New government data signaled slower demand for oil and gas."
Benchmark oil for October delivery lost $1.44 at $74.58 a barrel in midday trading on the New York Mercantile Exchange.
At the pump, motorists paid slightly more on average in part because of rising prices in the Midwest, where a pipeline has been closed for nearly a week, cutting off one supply of crude for refineries in the region.
The national average for a gallon of unleaded regular gasoline was $2.734 a gallon Thursday, according to AAA, Wright Express and Oil Price Information Service. That's up 5.1 cents from a week ago and 17.8 cents from a year ago.
Analysts expect prices to fall after Enbridge Energy Partners reopens the 670,000-barrel-a-day pipeline later this week. The line was closed last week after it sprang a leak in a Chicago suburb.
A series of mixed economic reports contributed to Thursday's dip in oil prices.
The Mid-Atlantic industrial production report contracted in September for the second straight month, although the Philadelphia Fed manufacturing index improved in August.
The Labor Department said first-time jobless benefits claims fell to a two-month low but still indicate sluggish economic growth.
PFGBest analyst Phil Flynn said there are concerns that demand may be softening as the slowest time of the year for energy products is at hand, between the busy summer driving season and ahead of the winter heating months.
Few traders think the two hurricanes in the Atlantic and one off Mexico's Gulf Coast will cause problems for oil and natural gas production, the analysts said.