Oil prices fall near $96, reversing morning gains
The price of oil sagged after the promise of more economic stimulus faded Thursday.
Benchmark crude fell 99 cents to finish at $96.27 per barrel in New York. The decline erased nearly all the gains from the day before, when minutes from the U.S. Federal Reserve's July 31-Aug. 1 meeting suggested the Fed was preparing new steps to boost the economy.
But on Thursday, oil traders were less sure that the central bank would act. And there was more uncertainty out of Europe.
James Bullard, president of the Fed's St. Louis bank, told CNBC Thursday that the minutes from the Fed's meeting were "stale" because the economy had picked up since then. The oil market had hoped for another round of bond-buying, called "quantitative easing," or QE.
"If you're going to downgrade the expectations of QE, that will definitely put some downward pressure on the market" for oil, said Phil Flynn of Price Futures Group.
The leaders of Germany and France also suggested Thursday that they would be hesitant to extend deadlines for Greece to make reforms tied to its bailout.
Oil prices headed lower around midday, shortly after the European leaders made their comments.
Overall, oil prices have climbed nearly $10 per barrel since Aug. 1, partly on hopes that the U.S., Europe and China would do more to increase growth in their respective economies. Growth increases demand for oil and other energy products.
At the pump, the national average for gasoline rose less than a penny overnight to $3.718 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That's about a quarter more than a month ago and about 15 cents higher than a year ago.
Natural gas prices also fell after the government said more natural gas went into storage last week than analysts had expected. The nation's gas reserves remain well above average because of strong production and relatively soft demand.
Other futures prices on the New York Mercantile Exchange:
— Gasoline increased 1.16 cents to $3.1158 per gallon.
— Heating oil rose 0.43 cents to $3.1330 per gallon.
— Natural gas fell 2.4 cents to $2.8020 1,000 cubic feet.