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GDP rise fails to stop oil price drop

GDP rise fails to stop oil price drop

A jump in U.S. gross domestic product wasn't enough to ease concerns Friday about falling energy consumption as oil prices dropped below $74 a barrel.
Benchmark crude for March delivery gave up 30 cents at $73.34 a barrel on the New York Mercantile Exchange.
Earlier in the day, the Commerce Department reported a 5.7 percent annual growth rate in the fourth quarter, the fastest pace since 2003. The expansion was driven by rising exports and business spending on equipment and software.
But the economic expansion hasn't led to a rise in energy consumption so far. The U.S. is still burning less gasoline than a year ago, and its appetite for petroleum products has dropped for four straight weeks, the Energy Information Administration said Wednesday.
"This could be more of a warning signal," Michael Lynch, president of Strategic Energy & Economic Research, said of the EIA report. The economic growth rate is expected to cool later this year, Lynch said, and "it's scary to think where oil demand will be then."
The dollar also strengthened for a fourth straight day as financial troubles in Greece, Spain, Portugal and Ireland pushed the euro lower. Crude, priced in U.S. currency, tends to fall as the dollar rises and makes oil barrels more expensive to buy for investors holding foreign currency.
In other Nymex trading in February contracts, heating oil fell less than a penny to $1.9125 a gallon and gasoline lost 1.23 cents at $1.9051 a gallon. The March contract for natural gas rose 5.1 cents to $5.189 per 1,000 cubic feet.
In London, Brent crude for March delivery dropped 29 cents to $71.84 a barrel on the ICE Futures exchange.


Updated : 2021-06-19 00:19 GMT+08:00