Oil in New York tumbled below $80 a barrel and Brent crude under $90 as economic reports increased concern that demand will slow amid rising supplies.
Futures dropped 4 percent as manufacturing slumped in the U.S., China and Europe, applications for U.S. unemployment benefits exceeded estimates and home resales were lower than expected. Oil stockpiles rose last week to the most since 1990, the Energy Department said Wednesday.
“The oil market is finally starting to catch up with the weak fundamentals,” said Rick Mueller, a principal with ESAI Energy LLC in Wakefield, Mass. “The U.S. and Chinese economies are looking weaker, which is raising concerns about demand during the second half of the year.”
Crude futures for August delivery fell $3.25 to $78.20 a barrel on the New York Mercantile Exchange, the lowest settlement since Oct. 4. The price is down 21 percent in 2012.
“Fears about the economy are making people very leery,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass. “The jobless claims, the manufacturing data and all the economic data are coming together to push almost everything down.”
At the pump, unleaded gasoline prices in Denver averaged $3.67 Thursday, down a half-cent from Wednesday and 6.6 cents from a month ago.
