Oil drops

The price of oil saw its largest drop in five months Wednesday as China's slowing economy raised questions about the strength of global oil demand.
By SANDY SHORE Modified: October 3, 2012 at 10:24 pm •  Published: October 4, 2012

The average price in New York, Connecticut and Pennsylvania is more than a dime higher than a month ago.

At $3.78 per gallon, the national average is the highest for this time of year and 37 cents more expensive than a year ago.

The China news overshadowed signs of improvement in U.S. service companies, which employ nearly 90 percent of the country's workforce. The Institute for Supply Management says its index rose in September at the fastest pace since March.

The U.S. government said crude inventories fell slightly last week but remain 8.4 percent above year-ago levels. Gasoline supplies also rose.

There will be further big price swings in oil this month as the market reacts to each piece of major economic news, says Jim Ritterbusch, of Ritterbusch & Associates. In a daily newsletter, he said oil could jump over the next two days on any positive surprises from the European Central Bank's policy meeting Thursday or the latest U.S. unemployment report on Friday.



Energy prices

In other energy futures trading:

Natural gas fell 13.6 cents, or 3.8 percent, to $3.395 per 1,000 cubic feet, a day after hitting a high for the year.

Heating oil dropped 5.9 cents to $3.066 per gallon.

Wholesale gasoline dropped 7 cents, or 2.5 percent, to $2.80 per gallon.

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