Share “Oil drops to lowest level in 6 months”

Oil drops to lowest level in 6 months

Associated Press Modified: May 16, 2012 at 7:15 am •  Published: May 15, 2012

NEW YORK (AP) — The price of oil dropped to a six-month low Tuesday on concern that economic uncertainty in Europe could hurt demand for crude.

Benchmark West Texas Intermediate crude fell 80 cents to end the day at $93.98 per barrel in New York. Oil hasn't finished this low since Dec. 19.

Oil has fallen 11 percent so far in May. Recent signs of global economic weakness in Europe and elsewhere have raised questions about the strength of energy demand.

Among recent developments:

— In Greece, party leaders again failed to form a government on Tuesday. They disagree about whether to accept more international bailouts and continue with painful spending cuts. This raises the possibility of Greece leaving the European common currency and undermining Europe's already fragile economy. Data released Tuesday show that only growth in Germany kept the eurozone from falling into recession in the first quarter.

— Economic reports in the U.S. have been mixed. On Tuesday, the government said consumers held back a bit on spending last month, even as gas prices declined. That follows reports showing moderating economic growth, a slowdown in the pace of hiring and a decline in gasoline use.

— China, the world's second-largest oil consumer, last week reported a sharp decline in both investment and industrial production growth for April.

Experts have been reining in forecasts for global oil demand in the near-term. At the same time, Saudi Arabia and other oil-rich countries have increased production. That combination has helped put pressure on oil prices.

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