NEW YORK, N.Y. - Benchmark oil was lower Friday ahead of a traditionally weak time for petroleum demand in the U.S.
Benchmark crude dropped $1.35 to $80.79 per barrel in New York in early afternoon trading.
October is usually a slow month in the oil business. The summer driving season is over, and it will be a couple of months before heating demand perks up and travellers set out for the winter holidays.
Oil has swung up and down in the last few weeks, as the European financial crisis roiled energy markets. By Friday, the end of the third quarter, traders turned their attention to falling crude price forecasts from major investment firms.
Morgan Stanley this week dropped its forecast for Brent crude by $30 to an average of $100 per barrel in 2012. Analyst Hussein Allidina cut the price to match tepid global economic growth and a recovery in Libyan oil production.
Allidina expects "significant supply increases and a material slowing in demand" by the second quarter of next year.
The Commerce Department reported Friday that Americans earned less in August. Eventually that could mean less consumer spending and reduced demand for oil. The government said that consumers spent more last month, but most of the increase was on food and gasoline.