Oil drops

Data released Wednesday showed that China's services sector expanded at a slower pace in September. The report came just days after a survey indicated that the country's manufacturing sector continues to contract. Those reports, plus the ongoing financial crisis in Europe, call into question the strength of global demand for oil.

Oil demand falls

China is the world's second-largest economy and a huge importer of commodities like oil. China's crude oil imports fell to 4.3 million barrels per day in August, the weakest level since October 2010, analysts at Bank of America Merrill Lynch estimated in a report last week.

Brent crude, which is used to price international varieties of oil, fell $3.40, or 3 percent, to $108.17.

At the pump, the national average price for gasoline is down just two cents over the past week and five cents in a month. Gas prices usually show a more pronounced drop after Labor Day. Refinery outages have caused shortages of gasoline on both coasts, causing gas prices in those regions to rise. California gas prices are averaging $4.23 per gallon, up about 10 cents from a week ago.