Oil dips, lowest price in a month
BY THE ASSOCIATED PRESS
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Published: November 14, 2009
NEW YORK — Oil slid Friday to its lowest price in a month as investors started to pay more attention to a yearlong slump in American energy demand.
For most of the year, oil prices surged as investors pumped money into crude contracts to protect themselves from a weakening dollar. Oil was thought of as a safe bet with demand expected to rise next year.
But as crude prices doubled from March to October, consumers and businesses continued to use less gasoline and diesel. Refiners struggled. In parts of the Midwest this week, gasoline was selling at a cheaper price than the oil used to make it, according to the
Oil Price Information Service.
With their business models turned upside down, many refiners decided to scale back and cut their losses.
Energy Information Administration data showed this week that refiners are operating at the lowest levels ever — except for years when hurricanes disrupted operations in the
Gulf of Mexico — according to analyst
Stephen Schork.
"That was a wake-up call,” said
Phil Flynn, an analyst with PFGBest. "People are starting to realize that maybe oil isn’t the best hedge against inflation.”
Benchmark crude for December delivery lost 59 cents to settle at $76.35 a barrel on the
New York Mercantile Exchange. Prices dipped as low as $75.57 earlier in the day, the lowest since Oct. 15.
In other Nymex trading, gasoline for December delivery lost 2.43 cents to settle at $1.9162 a gallon. Natural gas for December delivery added 2.2 cents to settle at $4.392 per 1,000 cubic feet.
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