NEW YORK – The price of oil fell below US$100 a barrel for the first time in three weeks Wednesday as reports showed U.S. economic growth stalled in the first quarter and American oil supplies rose to record levels last week.
Benchmark West Texas Intermediate crude for June delivery dropped $1.54 or 1.5 per cent to close at US$99.74 a barrel on the New York Mercantile Exchange. Brent crude, an international oil benchmark, fell 91 cents to US$108.07 on the ICE Futures exchange in London.
The U.S. Commerce Department said economic growth slowed to 0.1 per cent in the first three months of the year as winter storms chilled business activity. The sharp slowdown, while worse than expected, is likely to be temporary as growth rebounds with warmer temperatures.
The U.S. Energy Department said oil supplies rose by 1.7 million barrels last week. While the increase was less than expected by analysts, it still pushed the U.S. supply to a record 399.4 million barrels. In addition, gasoline supplies rose by 1.6 million barrels, whereas analysts had expected a decline.
Rising oil exports by Libya, though still far from earlier levels near 1.4 million barrels a day, also contributed to the drop in prices. Analysts cited information from Libya’s National Oil Corp. showing current exports at 285,000 barrels a day, up from 230,000 barrels a day in the first half of April.
In other energy futures trading on Nymex, wholesale gasoline lost four cents to US$2.96 a U.S. gallon (3.79 litres), heating oil shed four cents to US$2.93 a gallon and natural gas retreated two cents to US$4.82 per 1,000 cubic feet.