THE price of oil sank nearly 3 percent as a slowdown in China's growth added to doubts about the strength of the world economy and global demand for crude. It fell further after the close of trading when a bombing at the finish line of the Boston Marathon killed two people.
The Chinese government yesterday said growth in the world's second-largest economy slowed to 7.7 percent in the first quarter from 7.9 percent in the final quarter of last year. Growth was expected to accelerate slightly after several quarters of decline.
That slowdown, combined with weak economic reports from the US and Europe's malaise, suggests that demand for crude and refined fuels won't be strong enough to absorb the ample supplies on the world market.
West Texas Intermediate, the benchmark crude in the US, dropped US$2.58, or 2.8 percent, to finish at US$88.71 a barrel on the New York Mercantile Exchange. Earlier in the session, it hit US$87.86. Crude hasn't been that low since December, and it's dropped more than 8 percent in the past two weeks.
Brent crude, which is used to price oil used by many US refiners to make gasoline, fell US$2.41 to end at US$100.63 a barrel on the ICE Futures exchange in London. It briefly fell below US$100 for the first time in nine months.
Just as regular trading closed, two bombs exploded at the Boston Marathon finish line. Two were killed and dozens injured. Three hours after the bombing, President Barack Obama said the government was still not sure who was responsible.
By 6 p.m. EDT, WTI had dropped 1.4 percent to US$87.48 while Brent was down 1.3 percent to US$99.31 in electronic trading.
US gasoline prices were lower yesterday. The average price for a gallon of gasoline fell 3 cents over the weekend to US$3.53. That's 26 cents lower than the high for the year, set on Feb. 27. And gas is now 38 cents cheaper than a year ago.
In other futures trading on the Nymex:
- Wholesale gasoline fell 4 cents to finish at US$2.76 a gallon.
- Heating oil dropped 4 cents to end at US$2.83 a gallon.
- Natural gas fell 9 cents to finish at US$4.14 per 1,000 cubic feet.
