NEW YORK, N.Y. - Oil prices dropped Friday alongside modest declines on Wall Street as investors acknowledged that Europe needs to tighten its belt for years to work through a credit crisis.
Benchmark crude fell 73 cents to $93.23 per barrel in early afternoon trading on the New York Mercantile Exchange. In London, Brent crude lost $2.04 at $110.04 per barrel.
Prices have seesawed for weeks while Europe tried to deal with Greece's debt troubles. Oil soared Thursday after eurozone leaders hammered out an agreement to avoid default, and economic news in the U.S. soothed fears of another recession. Still, analysts agreed that Europe has much more work to do and the U.S. economy is not up to full steam.
"It's going to be a while before we see a broad-based solution to the problem," independent analyst Jim Ritterbusch said.
Europe will likely see energy demand fall while Greece and other countries cut spending to get their national debt under control. Meanwhile one of the continent's biggest oil suppliers, Libya, is expected to resume exports this year after an eight-month stoppage because of unrest there.
On Wall Street the major stock indexes were down slightly after Thursday's big rally. The Dow Jones industrial average was off about 15 points in midday trading.
In other energy trading, heating oil lost 4 cents at $3.0640 per gallon while gasoline futures fell 5 cents to $2.6617 per gallon. Natural gas futures rose 14 cents to $3.91 per 1,000 cubic feet.