Crude prices drop on economic worries, weather

Crude oil prices were significantly lower on Monday as the weather warmed in the northeastern United States and as analysts and traders worried that economic downturns in the US and in Europe will cut demand for oil and products made with it.

West Texas Intermediate crude for February delivery was $2.81 lower to $95.10 per barrel at the close of floor trade on the New York Mercantile Exchange while February contracts for Brent crude fell $2.36 to $94.43 per barrel on the ICE Futures Europe exchange in London.

Crude prices were up early in the session on a report that Iranian military vessels threatened to fire on US Navy vessels in the Straits of Hormuz over the weekend.

Almost a fourth of the world’s oil supply is transported through the waterway, which is located between Iran and Oman.

Demand for heating oil in the northeast is predicted to be more than 30 percent below normal over the next week due to warm weather, sending Nymex February heating oil futures 9 cents lower to $2.60 per gallon.

Nymex February gasoline dropped 8 cents to $2.44 per gallon but March natural gas added 7 cents to $7.89 per million British thermal units.