Oil prices fall on retail sales, inventories

NEW YORK—Oil prices fell yesterday as negative US economic news trumped a report showing a decline in the nation’s oil and gasoline supplies. Benchmark crude dropped 49 cents in midday trading Wednesday to $82.83. Brent crude, which is used to price international oil and to make gasoline in much of the United States slipped 25 cents to US$96.72.

The Commerce Department said yesterday that retail spending slipped 0.2 per cent in May, following an identical decline in April. That’s a sign consumers are pulling back, which could in turn lead to lower consumption of gasoline and crude oil. Meanwhile, the Energy Department said crude inventories fell by 200,000 barrels last week, though they remain relatively high for this time of year.

Gasoline supplies fell 1.7 million barrels, however, leaving stocks slightly below average. Analysts had expected an increase in gas supplies. The decline was surprising because US gasoline demand has been weak. It was a large drop in spending at the pump that dragged down overall retail sales in May, the Commerce Department said.

AP