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Oil prices fall on concerns about European economy

Oil prices fall on concerns about European economy

Oil prices fell Friday as concerns about Europe outweighed positive U.S. employment numbers.
Benchmark crude fell by 53 cents to $101.31 per barrel in midday trading in New York. Brent crude, which is used to price foreign oil varieties that are imported by American refineries, lost 24 cents at $112.50 per barrel in London.
Prices dropped as traders focused on European economic reports that showed weaker factory orders in Germany and soft European retail sales elsewhere in November.
"They threw a little bit of cold water onto the market," said Gene McGillian, a broker and analyst at Tradition Energy.
European countries are struggling to overcome huge government debts, and many economists expect Europe will fall back into recession this year and reduce demand for fuel.
Oil prices climbed briefly earlier in the day after the government said the U.S. unemployment rate dropped to 8.5 percent in December. Increased hiring boosts gasoline demand and pump prices as more workers return to the daily commute. The positive jobs report also pushed up the dollar against other major currencies like the euro. Oil, which is priced in dollars, tends to fall as the dollar rises and makes crude more expensive for investors holding foreign money.
In other energy trading, heating oil rose 2 cents to $3.06 per gallon and gasoline futures rose by less than a penny to $2.74 per gallon. Natural gas rose by 6 cents to $3.04 per 1,000 cubic feet.