Crude prices drop on economic concerns, equities declines

The price of crude oil fell Wednesday as the US dollar strengthened versus the euro, equities markets fell, and as there were indications that oil demand in China might to be as robust as had been believed.

US equities markets dropped on disappointing results from the banking sector and on a drop in new housing starts in the US in December, while there were concerns that curbs on bank lending imposed by the Chinese government could slow that Asian nation’s economy and, by extension, hurt oil demand.

Another concerns leading to the day’s price declines was that US oil stockpiles data are expected to show that supplies increased last week when new numbers are released by the Energy Information Administration tomorrow, a day late due to the observance of Martin Luther King, Jr. Day on Monday.

February contracts for West Texas Intermediate crude were down $1.60 to $77.42 per barrel around the close of trade on the New York Mercantile Exchange, while the most recent reports have Brent crude down $1.60 to $76.03 per barrel on the ICE Futures Europe exchange in London.

Nymex February natural gas futures were 3 cents lower to $2.03 per gallon, while March heating oil was down 2 cents to $2.04 per gallon and March natural gas dropped 7 cents to $5.47 per million British thermal units.

The retail price of a gallon of gasoline in the US dropped less than a cent overnight to $2.737 per gallon on average nationally, according to AAA.

Despite a sixth consecutive day of declines, a gallon of gas still costs motorists almost 15 cents more than it did last month and nearly 90 cents more than last year at this time.