Oil Falls Below $94 on Weak Outlook for Demand

NEW YORK (AP) -- The price of oil was knocked below $94 a barrel Friday by a combination of ample supplies and lukewarm demand.

Benchmark oil for July delivery was down 36 cents to $93.91 a barrel in midday trading on the New York Mercantile Exchange.

On Thursday, oil fell as low as $92.91 after weak manufacturing data from China raised questions about the strength of oil demand in the world's No. 2 economy. It closed at $94.25 a barrel in New York, down 3 cents. That followed a report from the U.S. Energy Department showing the country is well-supplied with oil, and gasoline demand remains below year-ago levels.

One question overhanging the market is what the Federal Reserve's next moves will be with its monetary policy. Recent comments from Fed policy makers, including Chairman Ben Bernanke, raised concerns that the Fed will scale back its effort to support the economy sooner than traders had expected.

Brent crude, a benchmark for many international oil varieties, was down 27 cents to $102.17 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

  • Wholesale gasoline was flat at $2.81 a gallon.
  • Heating oil lost 1 cent to $2.84 a gallon.
  • Natural gas fell 3 cents to $4.24 per 1,000 cubic feet.

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