The price of oil dropped below $100 per barrel for the first time since February following a disappointing U.S. jobs report and some signs of a slowing world economy.
Benchmark West Texas Intermediate crude fell as low as $97.83 Friday morning before edging back to $98.21 per barrel in New York. Crude prices are down 4.2 percent for the day.
The drop is part of a sustained decline in oil futures that should push U.S. retail gasoline prices lower ahead of the summer driving season.
Oil prices have been falling since Wednesday as analysts and traders increasingly focus on the economy. The Labor Department said Friday that the economy added just 115,000 jobs in April — far fewer than the pace of hiring earlier this year. Government data shows that U.S. oil consumption dropped 5.3 percent in the first quarter, and supplies have been growing for the past six weeks and hit a 22-year high in Cushing, Oklahoma, where benchmark crude is delivered.
The European economy also is slowing down as eurozone governments on that continent struggle with oppressive debt.
“We’re fearful that the economy is slowing more than we originally thought,” PFGBest analyst Phil Flynn said.
Oil has crossed the $100 mark 21 times during the past year. It rose as high as $113.93 per barrel last April and fell as low as $75.67 per barrel on Oct. 4.
As demand falls in the West, OPEC has been delivering more oil to world markets in an effort to force prices even lower. The fear is that another broader recession would destroy energy demand as it did during the economic crisis, and hit oil exporting countries hard. Western nations are planning talks with Iran over its nuclear program, which has eased fears of a protracted standoff in the Middle East. Concerns about Iran, which is believed to be building a weapon, helped push benchmark oil to its peak near $110 per barrel earlier this year.
The recent drop in oil has helped make retail gasoline cheaper in the U.S. Pump prices have declined by an average of 13 cents per gallon since peaking this year at $3.936 on April 6. The national average hit $3.802 per gallon ($1 dollar a liter) on Friday, according to auto club AAA, Wright Express and Oil Price Information Service.
OPIS chief oil analyst Tom Kloza said gas prices will head lower for the rest of the year. Kloza expects the national average to drop as low as $3.50 per gallon (92 cents a liter) before the Fourth of July.
In other futures trading, heating oil lost 5.12 cents to $3.0357 per gallon, wholesale gasoline lost 4.55 cents to $3.0045 per gallon, and natural gas lost 4.6 cents to $2.294 per 1,000 cubic feet. Brent crude, which is used to set the price of oil imported into the U.S., lost $1.98 to $114.10 per barrel.