Reply #3: Oil falls on economy worries

[ozymandius]

NEW YORK - Oil futures extended their declines Thursday as concerns about the economy and demand for oil grew and the dollar strengthened.

Retail gas prices, meanwhile, fell further below their recent records, while diesel rose to a new record above $4 a gallon.

For a second day, the oil market appeared focused on the economy and oil's underlying supply and demand fundamentals — factors it ignored in recent weeks while rocketing to a series of new records. However, some analysts said oil's price swoon may not last for long; most investors expect the Federal Reserve to cut interest rates several more times this year, moves that are sure to put new pressure on the dollar.
.....

But there are signs the market may be divorcing itself from its focus on the dollar. Prices were pressured Thursday when the Labor Department said the number of people filing for unemployment benefits jumped by 22,000 last week, much more than expected. A sharp slowdown in the economy could reduce demand for oil and gasoline. On Wednesday, the Energy Department said gasoline demand dropped by 1 percent last week.

Light, sweet crude for May delivery fell 70 cents to settle at $101.84 a barrel on the New York Mercantile Exchange Thursday after sliding to as low as $98.65 earlier. It was the first dip by a front-month oil contract under $100 since March 5. On Wednesday, the expiring April contract fell $4.94 a barrel to settle at $104.48.

http://news.yahoo.com/s/ap/oil_prices