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Oil prices drop to US$101 per barrel

Published:Wednesday | April 11, 2012 | 12:00 AM

Oil closed at a two-month low on more troubling signs for the world economy.

Benchmark United States crude dropped to US$101.02 per barrel in New York on Tuesday, while Brent crude fell to US$119.88 per barrel in London.

Natural gas fell to a 10-year low to settle down 7.6 cents at US$2.031 per 1,000 cubic feet.

Global stock markets also declined, along with the prices of most industrial metals.

There was fresh concern about economic strength in China and the US. China said that European demand for its manufactured goods is declining - one more sign of a slowdown in the world's second-biggest economy. A US government report indicated that wholesalers are restocking shelves at a slower pace. That will likely hurt first-quarter economic growth.

After months of focusing on the West's nuclear dispute with Iran, oil traders are more worried about the impact of high oil prices on the economy, analysts say.

The concern appears warranted. Small business owners in the US said in a survey released Tuesday that they're increasingly worried about high fuel prices.

This all follows the disappointing US jobs news from last week, when the government said that employers added only 120,000 jobs in March - half as much as the previous three months.

Oil is now the closest it's been to US$100 since February 13. The price has dropped US$6 per barrel, or 5.6 per cent, in the last two weeks.

In other energy trading, heating oil gave up 5.02 cents to US$3.096 per gallon and gasolene futures lost 4.71 cents to US$3.2496 per gallon.

- AP