Oil drops back to near $84 amid ample US suppliesNew factory production and retail sales figures from China, which is one of the world's biggest consumers of crude, added to signs an economic recovery is taking shape after a painful slowdown.
By: By Pablo Gorondi, Associated Press, Superior Telegram
The price of oil slid back to near $84 a barrel Friday as traders weighed evidence of ample U.S. supplies against signs of recovery in China's economy.
By early afternoon in Europe, benchmark crude for December delivery was down 80 cents at $84.29 a barrel in electronic trading on the New York Mercantile Exchange. The contract on Thursday rose 65 cents to close at $85.09 in New York.
New factory production and retail sales figures from China, which is one of the world's biggest consumers of crude, added to signs an economic recovery is taking shape after a painful slowdown.
But the improvements in China's economy are still too modest to make up for weakness in Europe and the U.S.
Supplies of crude, meanwhile, are high and more than enough to meet modest growth in demand. U.S. oil production is at 17-year highs.
A stronger dollar, which makes crude more expensive and a less attractive investment for traders using other currencies, also weighed on oil prices. On Friday, the euro was down to $1.2693 from $1.2745 late Thursday in New York.
Analysts say risks to future supplies of oil remain and could keep prices from falling much lower.
"In addition to the ongoing problems with North Sea production, we are now also seeing delays to shipments in Nigeria and Azerbaijan. This is compounded by the continuing tensions in the crisis-ridden regions of the Middle East," said a report from analysts at Commerzbank in Frankfurt.
Brent crude, which is used to price international varieties of oil, was down 59 cents at $106.66 a barrel on the ICE Futures exchange in London.
In other Nymex energy futures trading:
— Wholesale gasoline was down 0.17 cent to $2.6056 a gallon.
— Heating oil dropped 0.55 cent to $2.9499 a gallon.
— Natural gas lost 3.8 cents to $3.57 per 1,000 cubic feet.