Oil prices fall on economic fears in the US and Europe

Monday 18 February 2013 14.57
Oil prices lower on weak economic figures
Oil prices lower on weak economic figures

The price of US oil hovered below $96 a barrel today.

Markets were weighed down by data released late last week which showed that US industrial production weakened and Europe remained mired in recession.

Benchmark crude for March delivery was down 17 cents to $95.69 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.45 on Friday.

Brent crude, used to price many international varieties of oil, was down a cent to $117.65 a barrel on the ICE Futures exchange in London.

Trading volume was lower than usual as floor trading, like US financial markets, was closed for the Presidents Day holiday.

Investor sentiment has been subdued since the Federal Reserve said Friday that US factory production slowed in January, mostly because of a big drop in output at car factories. Most analysts think the slowdown is temporary, but it was enough to raise concern about the still-sluggish economic recovery.

Traders were also concerned about a deepening recession across the economy of the euro zone. Their combined economic output shrank by 0.6% in the final quarter of 2012 from the previous three-month period. The decline was bigger than the 0.4% drop expected and the steepest fall since 2009.

Markets were waiting for comments from European Central Bank President Mario Draghi, who is meeting Monday with members of the European Parliament to discuss the financial crisis in the euro zone.