Economic fears drive oil prices to eight-month low; gas prices fall
U.S. oil prices fell as low as low as $81.21 a barrel Monday -- the weakest level since Oct. 6, 2011 -- as evidence of a slowdown in the Chinese economy last month added to fears of a sputtering global recovery.
Crude oil prices later recovered to $83.08 a barrel on the New York Mercantile Exchange, but were still down 15 cents so far from their previous closing price. In London, oil prices on the ICE Futures Europe Exchange were down $1.07 cents to $97.37 a barrel.
The biggest reason for another down day so far, analysts said, was China’s non-manufacturing purchasing managers index, which fell last month and suggested another slowdown in economic activity, said Phil Flynn, senior market analyst for Price Futures Group Inc. in Chicago.
Flynn said that “oil could fall below $80 a barrel by the end of this week” if the commodities markets lose confidence in the ability of world leaders to deal with a number of problems, such as the weak banking sector and debt in Europe.
There was some good news in the numbers as pump prices for retail gasoline continued to fall in California and across much of the rest of the U.S.
The average price for a gallon of regular gasoline in California was $4.221 a gallon, down 6.2 cents since last week. That’s according to the AAA Fuel Gauge Report, which uses credit card receipts collected daily from more than 100,000 retail outlets across the U.S.
Nationally, the average price for a gallon of regular gasoline fell to $3.585, down 5.6 cents since last week.
“An impressive decline in average gasoline prices will now be extended as the West Coast begins to see lower prices in the days ahead,” said Patrick DeHaan, senior petroleum analyst from GasBuddy.com. “Motorists will continue to see prices sliding east of the Rockies.”
GasBuddy.com tracks the highest and lowest fuel prices listed at more than 140,000 service stations in the U.S. and Canada.