Crude prices drop on declines in demand

Crude oil prices were lower in Monday after it seemed that demand for oil and gasoline in the United States was falling just as OPEC began to raise production in practice if not as a policy measure.

Several factors worked to limit declines, however, including the news that fog had closed some waterways in Texas that are used by oil tankers, a weakening of the dollar in relation to the euro, and the possibility that the Federal Reserve will cut interest rates when it meets Tuesday.

Near the close of floor trade on the New York Mercantile Exchange, West Texas Intermediate crude for January delivery had dropped 40 cents to $87.88 per barrel while January contracts for Brent crude was down 53 cents to $88.11 per barrel on the ICE Futures Europe exchange in London.

Nymex January gasoline was 2 cents lower to $2.25 per gallon and January heating oil fell 3 cents to $2.48 per gallon while January natural gas dropped 13 cents to $7.03 per million British thermal units.

At-the-pump prices for gasoline in the United States dropped 2 cents over the weekend to an average $3.003 per gallon and are down 11 cents since the middle of November.