Oil prices fell to near $108 a barrel Thursday in Asia on concerns that rising fuel costs could undermine U.S. economic growth and demand for crude.
Benchmark crude for May delivery was down 51 cents at $108.32 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained 49 cents to settle at $108.83 on Wednesday.
In London, Brent crude for May delivery was down 54 cents to $121.39 a barrel on the ICE Futures exchange.
Crude has traded near $108 this week as traders mull the impact of Libya’s civil conflict, a weakening U.S. dollar and China’s fourth interest rate hike since October. Investors are also concerned a 29 percent jump in oil prices since mid-February will force consumers to spend more on fuel costs and will eventually undermine crude demand.
Regular unleaded gasoline in the U.S. currently averages $3.69 a gallon, up 23 percent from a year earlier.
“The main worry is that with more of the consumer’s budget going toward gas at the pump, it will hold back the nascent recovery,” said Anthony Michael Sabino, a professor at St. John’s University’s business school. “It will put a crimp into spending plans for corporate America, as the costs of energy, transportation, and so forth rise accordingly.”
In other Nymex trading in May contracts, heating oil fell 1.2 cents to $3.18 a gallon and gasoline dropped 1.4 cents to $3.18 a gallon. Natural gas futures were down 1.5 cents at $4.13 per 1,000 cubic feet.
