Oil Falls After Exxon Shuts Pipeline

NEW YORK (AP) -- The price of oil fell Monday as Exxon (NYSE: XOM  ) shut a pipeline that carries oil out of the Midwest and a report showed a cooling of U.S. manufacturing activity.

Benchmark oil for May delivery was down $1.15 to $96.08 per barrel in morning trading on the New York Mercantile Exchange.

ExxonMobil shut its Pegasus pipeline after a leak in Arkansas. The pipeline, with a capacity of 96,000 barrels a day, carries Canadian crude oil from the Midwest to refineries in the Gulf of Mexico.

Oil added to earlier losses after an industry group said growth in U.S. manufacturing activity slowed in March. The Institute for Supply Management's manufacturing index dropped to 51.3 from 54.2 in February.

Oil rose $3.52 a barrel, or 3.8 percent last week, driven by signs of strength in the U.S. economy. The gain for March was 5.6 percent. Higher prices motivated investors to cash in.

At the pump, the average price for a gallon of gas fell 1 cent over the weekend to $3.63 a gallon. That's down 13 cents from a year ago and 30 cents lower than at this time last year.

In other energy futures trading on the New York Mercantile Exchange:

  • Wholesale gasoline fell 2 cents to $3.09 a gallon.
  • Heating oil was down 1 cent to $3.03 a gallon.
  • Natural gas fell 2 cents to $4 per 1,000 cubic feet.

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