Current Oil Prices Post 4 Percent Drop

Current oil prices reflect a drop of 4 percent as traders moved back their focus on the challenges of the world economy.

On the NYMEX, the U.S. benchmark shed $3.56 to a crude price per barrel of $85.15, a level that offset its gain of 3.5 percent during the day prior to the re-election of President Barack Obama.

The leaders of Europe gave more warnings about the economy of the region which has been weighed down with a debt problem for over three years.

The executive arm of the European Union forecasted the region’s economic growth to fall by 0.3 percent this 2012. In the 17 nations that utilize the euro, the economy is anticipated to shed by 0.4 percent. The level of unemployment is projected to stay high until at least 2014.

That may further lower the region’s oil demand. Europe’s daily oil consumption for quarter three of this year declined to 14.1 million barrels from last year’s 14.7 million barrels .

In the United States, the focus is shifting to a set of simultaneous tax increases and spending reductions called the “fiscal cliff” that will occur unless Congress take some action by the 1st of January. Economists caution against another recession if the White House and Congress cannot make a deal.

The economy’s slow growth and low demand will affect the current oil prices, according to oil analyst Jim Ritterbusch. He expected the crude price per barrel of the U.S. benchmark to range between $80 and $90 until this year ends.

In the meantime, the average gasoline price today throughout the entire U.S. stayed at $3.46 a gallon, according to the Wright Express, AAA and OPIS. That rate is lower by almost 36 cents compared to last month but higher by 6 cents compared to the same day last year.

Drivers may see a continuous drop in gasoline prices,at least until Thanksgiving, according to most analysts.

By: Chris Termeer