Business/Finance

Oil below $103 amid possible reserves release

Thursday, March 29, 2012
FILE - In this June 30, 2011 file photo, a motorist pumps gasoline into his vehicle at an Exxon gas station, in Farmers Branch, Texas.

FILE - In this June 30, 2011 file photo, a motorist pumps gasoline into his vehicle at an Exxon gas station, in Farmers Branch, Texas. (AP Photo/Tony Gutierrez, File)

Oil dipped below $103 a barrel and finished at a six-week low Thursday on expectations that the U.S. and Europe will release crude reserves to push energy costs lower.

Benchmark oil for May delivery lost $2.63, or 2.5 percent, to settle at $102.78 a barrel on the New York Mercantile Exchange. Brent crude for May delivery fell $1.77 to end at $122.39 per barrel in London.

France's prime minister said Thursday that there's a "good chance" that the U.S. and Europe will agree to release some of their oil reserves. The White House has been mum about any future plans for the nation's Strategic Petroleum Reserve.

The stock release would seek to lower prices, which have been driven higher in recent months by fears that a potential military attack by Israel or the U.S. on Iran's nuclear facilities would disrupt crude supplies. Analysts worry that a further spike in crude prices will spark inflation and hurt consumer spending.

In other energy trading in New York, natural gas prices tumbled to a 10-year low after a surprising jump in U.S. supplies.

The futures price dropped sharply after the government reported that natural gas inventories expanded well beyond what analysts expected. The U.S. total supply grew by 57 billion cubic feet last week to a level that's now 59 percent above the five-year average.

There's enough gas in storage to supply all the country's needs for more than a month, and analysts say storage facilities across the U.S. will be pushed close to capacity in coming months.

Natural gas futures plunged by 13 cents, or 5.7 percent, to finish at $2.15 per 1,000 cubic feet.

Heating oil fell 5 cents to end at $3.16 per gallon and gasoline futures were down about a half-cent to finish at $3.40 per gallon.

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