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Oil tumbles below US$90

Price tumble comes as US consumers cut spending in August


September 14, 2011
by CANADAN PRESS

NEW YORK : Oil prices slipped below US$90 per barrel September 14 as government data showed Americans keeping a tighter grip on their wallets.

The US Commerce Department reported consumers spent less on vehicles, clothing and furniture in August. Consumer spending drives the US economy and a decline in retail spending suggests Americans will continue to consume less fuel.

Benchmark West Texas Intermediate crude gave up US$1.42 to $88.79 per barrel at midday in New York while Brent crude lost 75 cents to $109.02 in London. The government also reported oil supplies fell over twice as much as expected last week while gasoline supplies rose. US supplies were affected earlier this month as tropical storm Lee temporarily shut down oil production in the Gulf of Mexico.

Wholesale gasoline demand dropped 2.7 percent as gasoline prices rose.In other commodities trading, heating oil fell 1.01 cents to $2.926 per gallon and gasoline futures dropped 3.6 cents to $2.7064 per gallon. Natural gas added six cents to $4.04 per 1,000cft.