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Oil drops back to near $84 amid ample US supplies

Associated Press Modified: November 9, 2012 at 7:45 am •  Published: November 9, 2012

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.

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