Oil dips, lowest price in a month

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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