Oil Prices Fall for 3rd Day on Global Uncertainty
Source: Associated Press, Sandy Shore (11/23/10)
"China took steps to control inflation, North and South Korea clashed."
Traders also were concerned Tuesday about financial problems in some European countries. Benchmark oil for January delivery lost 64 cents at $81.10 a barrel in midday trading on the New York Mercantile Exchange.
At the pump many motorists found gas prices at their highest level in three years, as they filled their tanks ahead of the long Thanksgiving weekend.
The national average for a gallon of regular was $2.87 on Tuesday, about $0.02 down from a week ago but nearly a quarter more than motorists paid a year ago.
Oil prices have lost ground as traders opted to sell their holdings to protect assets in the event energy demand falls amid global uncertainty.
A key issue has been China's ongoing efforts to control inflation. China has been an aggressive importer of oil and other products to meet the needs of a robust economy that boosted inflation to a 25-month high in October.
China's now banning hoarding of oil, coal and other key commodities to ensure supplies and contain price increases.
Meanwhile, escalating tensions between North and South Korea also pressured prices. The two sides exchanged artillery fire after the North shelled an island near a disputed sea border, killing at least two South Korean marines and setting dozens of buildings ablaze.
"If tensions heat up, it can be a negative for oil demand as uncertainty in the region may slow economic activity," PFGBest analyst Phil Flynn said.
The two developments added to ongoing concerns that financial problems will deepen in some countries in the 16-nation eurozone after Ireland sought help to resolve its debt crisis.