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Oil price falls to $88 on renewed concerns about Europe

As Europe struggles, its demand for manufactured goods from the U.S. and China will likely decline. China, the world's second biggest oil consumer behind the U.S., already foresees slower economic growth in the third quarter.

By CHRIS KAHN
The Associated Press

7/23/2012

NEW YORK — The price of oil is falling as concerns increase about Europe's debt-ridden economies.

Borrowing costs soared for Spain and Italy Monday, reaching levels that are considered unsustainable for more than a few months. Spain and about a third of other eurozone nations already are in recession, and many analysts worry that other European nations will follow.

As Europe struggles, its demand for manufactured goods from the U.S. and China will likely decline. China, the world's second biggest oil consumer behind the U.S., already foresees slower economic growth in the third quarter. And the U.S. economy is still sluggish. Less growth means less demand for oil.

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Benchmark oil dropped $3.69 to finish at $88.14 per barrel. Heating oil fell 10.54 cents, or 3.6 percent, to $2.8189 per gallon and wholesale gasoline ended down 6.01 cents, or 2 percent, at $2.8829 per gallon. Natural gas rose 3.6 cents to $3.117 per 1,000 cubic feet.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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