Oil below $92 on gloomy economic outlook
The price of oil fell below $92 a barrel on Monday, dragged down by concerns about weakening global growth and demand for crude.
By early afternoon in Europe, benchmark crude was down $1.28 at $91.61 in electronic trading on the New York Mercantile Exchange. The contract rose 47 cents on Friday to close at $92.89 in New York.
In London, Brent crude was down $1.40 to $110.02 on the ICE Futures exchange.
New efforts to revive growth from central banks in Europe, Japan and the U.S. have not been enough to overcome pessimism about the global economy's prospects. When economic growth slows, so does demand for fuel which typically results in lower oil prices. A reduction in energy costs can help boost economic growth further down the track.
"Renewed concerns about a slowdown in the global oil demand weighed on market sentiment and prompted investors to some profit taking," said a report from Sucden Financial in London. "In addition, the strengthening U.S. dollar added further pressure to the oil market, while weaker global equity markets set the bearish tone on today's trading."
A stronger dollar makes crude for expensive and a less attractive investment for traders using other currencies. On Monday, the euro was down to $1.2920 from $1.2974 on Friday.
On Friday, the U.S. Labor Department said that the unemployment rate rose in more than half of the country's states last month, the latest evidence that hiring remains tepid across the world's biggest economy. The World Trade Organization, meanwhile, cut estimates for global trade growth for this year and next.
In another sign of pessimistic economic expectations, Germany's Ifo index of business confidence fell for the fifth month in a row.
In other Nymex energy futures trading, heating oil declined 2.2 cents to $3.0957 a gallon and natural gas fell 3.1 cent to $2.854 per 1,000 cubic feet. Wholesale gasoline was down 2.95 cents to $2.79 a gallon.