Oil falls to below $97, extending 2-week sell-off

[May 17, 2011]  SINGAPORE (AP) -- Oil prices fell below $97 a barrel Tuesday in Asia, extending a two-week fall amid investor concern slowing U.S. economic growth could undermine demand for crude.

Benchmark crude for June delivery was down 50 cents to $96.87 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $2.28 to settle at $97.37 on Monday.

In London, Brent crude for June delivery was down 34 cents to $110.50 a barrel on the ICE Futures exchange.

Crude has fallen about 16 percent from near $115 on May 2 as traders fret high fuel costs and tepid economic growth will hurt U.S. consumption. Crude surged 35 percent between February and the beginning of this month.

On Monday, traders shrugged off a weaker dollar, which makes crude cheaper for investors with other currencies and usually helps push oil prices higher.

Analysts are also eyeing the end next month of a Federal Reserve program to purchase treasury bonds, known as quantitative easing. It has helped boost money supply and asset prices while also weakening the dollar.

"The end of quantitative easing is the sea-change beneath the broader moves" in the oil price, Cameron Hanover said in a report.

In other Nymex trading in June contracts, heating oil fell 0.7 cent to $2.87 a gallon and gasoline dropped 2.0 cents to $2.91 a gallon. Natural gas futures slid 1 cent to $4.31 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

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