Crude falls for fourth day, below US$95

The price of oil fell for the fourth consecutive day last Friday, below US$95 a barrel, as a rebounding US economy drove the dollar higher and signs continue to emerge that there is an ample supply of crude worldwide.

Benchmark US oil for February delivery fell US97 cents to US$94.47 a barrel in midday trading. Brent crude, used to price international crude processed by many US refineries, fell US86 cents to US$106.92 a barrel in London.

US crude fell by US$2.98 last Thursday, the biggest one-day drop since November of 2012. Prices have been dropping sharply since two Fridays ago, when a barrel closed above US$100 for first time since October.

A financial recovery in the US would typically drive commodities higher, given the appetite of the world's largest economy. But that recovery has been driven in part by a massive bond-buying programme at the Federal Reserve.

The Fed recently began winding that programme down, however, and that is pushing the value of the dollar even higher.

A stronger dollar makes commodities such as oil that are priced in dollars more expensive for buyers using other currencies.

Demand is rising, but supplies appear to be sufficient. The Energy Department reported Friday that average petroleum demand over the past four weeks rose 3.3 per cent compared with last year. While oil stocks fell by 7 million barrels, that is "above the upper limit of the average range for this time of year", according to the weekly status report.

The national average retail price of gasolene edged up less than a penny to US$3.33 per gallon, according to AAA, OPIS and Wright Express. That's the highest level ever for this time of year - US5 cents higher than last week and US4 cents higher than a year ago.

And there is a chance that additional sources of crude may soon become available.

There is a Libyan oilfield that could add 300,000 barrels of daily production to the global marketplace, further diluting prices.

Libya remains unstable, however, and last Sunday a militia group that shut down most of the nation's oil terminals for months threatened to cut off natural gas deliveries to the capital.

- AP