Oil prices tumble over flat demand

Oil prices fell on Thursday as fiscal-cliff euphoria fizzled and the traders evaluated ample energy supplies against lackluster demand.

Benchmark crude for February delivery fell 36 cents at late afternoon Bangkok time to $92.76 in electronic trading on the New York Mercantile Exchange. Prices had jumped on Wednesday after a deal in Washington averted the dreaded “fiscal cliff.” The contract rose $1.30 to finish at $93.12 a barrel on the Nymex.

Despite the stopgap budget deal, more hurdles are ahead for the U.S. economy, including a new deadline for more spending cuts in two months.

Moreover, Moody’s Investors Services said the U.S. government’s “AAA” credit rating could be at risk if lawmakers fail to take additional steps to lower the deficit, which has topped $1 trillion annually in each of the past four years.

Carl Larry of Oil Outlooks and Opinions said production levels were “at new high” and noted that “the room for demand to expand is not even close to what we had just a few short years ago before the global recession.”

In other energy futures trading on the New York Mercantile Exchange- Wholesale gasoline fell 0.1 cents to $2.7937 a gallon. Heating oil fell 1.7 to $3.041 a gallon. Natural gas fell 1.9 cents to $3.214 per 1,000 cubic feet.