Posted: Aug 10, 2010 11:20 AM by Melissa Canone
Oil prices fell Tuesday on more signs of slowing U.S. and global
economies, and the Federal Reserve debated the best ways to
energize the recovery.
Benchmark crude fell $1.24 to $80.24 a barrel in midday trading
on the New York Mercantile Exchange.
At the pump, the national average for a gallon of unleaded
gasoline was $2.781 Tuesday - about 5.5 cents higher than a week
ago, according to AAA, Wright Express and Oil Price Information
Service. The price is 13.6 cents higher than a year ago.
A new report showed China's import growth fell in July,
including a 17.5 percent drop in oil imports, MF Global analyst
Andrew Lebow said. Traders often look to China, a big importer of
oil, as an indicator of global economic recovery.
In the U.S., the Labor Department said productivity fell in the
second quarter. Analysts expected a slight uptick.
The Fed meeting on Tuesday will consider steps to stimulate the
U.S. recovery. A statement is expected later in the day.
Meanwhile, the National Hurricane Center is monitoring
thunderstorms in the eastern Gulf of Mexico that could become a
tropical storm. Another area of disturbed weather lurks out in the
Atlantic. Big storms can boost the price of oil and gas on concerns
about production and supplies.
The threat of tropical storms is not affecting current oil
prices because a premium for the effect of hurricanes is built into
the price, PFGBest analyst Phil Flynn said.
"The market has been less concerned because here we are already
at Aug. 10 and we really haven't had a storm that's done any major
damage down in the gulf," he said. "I know it only takes one and
we realize that but really I think the market was pricing in such a
monster season that it thinks it can avoid this one storm."
In other Nymex trading in September contracts, heating oil fell
2.57 cents to $2.1281 a gallon, gasoline dropped 2.17 cents to
$2.0970 a gallon and natural gas lost 1.7 cents at $4.291 per 1,000
In London, Brent crude was down $1.49 at $79.50 a barrel on the
ICE Futures exchange.