Oil price falls below $96

Published on NewsOK Modified: January 2, 2014 at 3:34 pm •  Published: January 2, 2014
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The price of oil dropped 3 percent Thursday on expectations of higher global supplies and the impact of a strengthening dollar.

U.S. benchmark oil for February delivery fell $2.98 to close at $95.44 a barrel in New York. It was the biggest one-day drop in crude since November of 2012.

Brent crude, a benchmark used to price international crude used by many U.S. refineries, was down $3.02 to $107.78 a barrel.

U.S. oil was lower for the third straight day after closing above $100 per barrel Friday for the first time since October. Oil had risen because an improving U.S. economy lifted consumption.

The recent retreat in the price follows reports that an end to protests at a major Libyan oil field could return 300,000 barrels of daily production to the global market. That has raised expectations that supplies will be ample.

Brighter prospects for the U.S. economy have also raised expectations that the Federal Reserve will continue to shrink its stimulus program, and that has helped boost the value of the dollar. A stronger dollar makes commodities such as oil that are priced in dollars more expensive to buyers using other currencies. That lowers demand, and prices.

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