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Oil drops as Fed euphoria fades; gas below $3.50

Benchmark oil for October delivery dropped $1.68, or 1.6 percent, to close at $106.39 a barrel on the New York Mercantile Exchange.

The Associated Press

9/19/2013

NEW YORK — The price of oil fell Thursday as excitement faded over the U.S. Federal Reserve's decision to keep its monetary stimulus in place.

Benchmark oil for October delivery dropped $1.68, or 1.6 percent, to close at $106.39 a barrel on the New York Mercantile Exchange.

A day earlier, oil rose 2.5 percent after the Fed unexpectedly maintained its stimulus for the U.S. economy and the Energy Department reported a bigger than expected drop in supplies of crude oil and gasoline.

Meanwhile, most U.S. drivers are seeing lower prices at the gas pump. The nationwide average for a gallon of gasoline dropped below $3.50 for the first time since July 9. At $3.49 a gallon, the average is down 6 cents from a week ago. However, Californians aren't sharing in the relief. They're paying about 7 cents more on average than a week ago, due to unplanned maintenance at some refineries.

In other markets, Brent crude, the benchmark for international crudes used by many U.S. refineries, slipped $1.84, or 1.7 percent, to $108.76 a barrel on the ICE Futures exchange in London.

Energy futures trading in New York showed:

— Wholesale gasoline dropped 4 cents to $2.70 per gallon.

— Natural gas gained 1 cent to $3.72 per 1,000 cubic feet.

— Heating oil slipped 4 cents to $3.00 per gallon.