Crude oil extends week-long plunge, falls to US$93.43 a barrel on NYMEX

The price of oil slipped again Monday, adding to a week-long plunge.

Benchmark West Texas Intermediate crude for February delivery fell 53 cents to close at US$93.43 on the New York Meercantile Exchange. On Friday, the contract fell $1.48, a decline that pushed the price 6.4 per cent lower for the week.

Brent crude, used to price international crude processed by many U.S. refineries, fell 16 cents to US$106.73 in London on Monday.

Analysts say crude prices are falling because global supplies appear strong enough to meet growing demand in the U.S., the world’s biggest consumer.

Also, an improving economy in the U.S. has prompted the Federal Reserve to begin winding down its stimulus program, which had propped up oil prices. The tapering of the stimulus program is leading to a stronger dollar, which makes commodities such as oil that are priced in dollars less attractive to buyers using other currencies.

Now that prices have fallen to account for ample supplies and a stronger dollar, they will be influenced in the coming weeks mainly by events in the Middle East, energy analyst Jim Ritterbusch predicted.

Protests at one of Libya’s largest oil fields reportedly ended last week, which could allow the field to restart production and deliver more than 300,000 barrels of daily production to the global market. Traders, however, caution that the situation in the northern African country is still unpredictable nearly three years after the start of its 2011 civil war.

“We continue to place Libya at the forefront of importance,” Ritterbusch wrote in a report Monday. “Some oil fields are reportedly resuming operations. However, output recovery thus far has been limited and the ability to export within the eastern region of the country remains as an obstacle.”

In other energy futures trading, wholesale gasoline fell a fraction of a cent to US$2.646 a U.S. gallon (3.79 litres), heating oil was flat at US$2.939 a gallon and natural gas was also flat US$4.31 per 1,000 cubic feet.