BUSINESS

Oil slips after gaining for 3 straight days; gas prices nearly $3.65 per gallon

08/08/2012 04:51 EDT | Updated 10/08/2012 05:12 EDT
The upward climb in oil prices paused on Wednesday. But the respite may not last long.

Oil has registered a 20 per cent gain since late June. Some investors have been buying because they fear a disruption of supplies from the Middle East while others hope that central banks will take more steps to promote economic growth.

Benchmark oil fell 32 cents to finish at US$93.35 per barrel in New York. Traders suggested oil should soon post more increases.

"It seems like the market is catching its breath a little," said Gene McGillian, a broker and analyst at Tradition Energy. The price had risen more than $6 per barrel over the past three trading days.

Oil fell to $77.69 per barrel in late June as European leaders struggled to resolve their massive debt crisis and turn around the region's fragile economy. The economies in the U.S. and China also slowed, which pressured global economic growth.

Since then, each weak economic report fuels speculation that the policy-makers in the three countries would approve additional measures to aid the economy. That could boost demand for oil and other energy products.

Tensions in the Middle East have fuelled fears of a disruption to supplies and boosted oil prices. Weeks of violence in Syria have some concerned about a regional conflict, McGillian said. In addition, the West's dispute with Iran over its nuclear program remains unresolved.

Oil got a temporary boost Wednesday from a bigger-than-expected decline in U.S. stockpiles. But the price fell in the afternoon.

At the pump, the U.S. average price of gasoline rose about a penny to $3.647 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That's up nearly 27 cents from a month ago. It's about two cents less than a year ago.

In Canada, the price at the pump averaged C$1.256 per litre, up from $1.215 a month ago, according to GasBuddy.com.

Brent crude, which is used to price international varieties of oil, gained 14 cents to finish at US$112.14 per barrel in London.

Other futures prices on the New York Mercantile Exchange:

— Heating oil increased 1.79 cents to end at $3.0159 per gallon.

— Gasoline fell 1.09 cents to end at $2.9804 per gallon.

— Natural gas fell 3.1 cents to end at $2.933 per 1,000 cubic feet.

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