Oil fell for a fifth straight day as an unexpected increase in U.S. oil and gasoline supplies offset positive economic news.
Meanwhile, the nationwide average price for a gallon of gasoline is now $3.45, the lowest since the end of January.
Benchmark oil for November delivery dropped 47 cents to finish at $102.66 a barrel on the New York Mercantile Exchange. That's the lowest closing price since July 3.
Oil has fallen 7 percent since closing at a two-year high of $110.53 on Sept. 6. Since then, diplomatic efforts have averted a U.S. military strike against Syria, and tensions between the U.S. and Iran have shown signs of a thaw. As a result, the market has removed the so-called risk premium from oil, which some analysts put at about $5 to $6 a barrel.
On Wednesday, there were signs of a slowdown in demand for oil and fuel following the end of the summer driving season. The Energy Department said that U.S. crude oil supplies increased by 2.6 million barrels, while gasoline supplies rose 200,000 barrels in the week ended Sept. 20. Analysts expected supplies of both oil and gasoline to drop. The increase in supplies came as refineries pulled back from a strong pace during the late summer.
On the economic front, reports showed Americans stepped up purchases of new homes in August after cutting back in July, while companies placed slightly more orders in August for U.S. long-lasting manufactured goods. The increase in home sales suggested that higher mortgage rates are not yet slowing the housing recovery.
Still, investors remained cautious as Congress and the White House gear up for another budget fight. Failure to reach an agreement could make it impossible for the government to pay some of its bills.
At the pump, drivers are paying some of the lowest prices since winter, according to AAA. The nationwide average has fallen 14 cents so far this month. Gas is now 36 cents cheaper than at this time last year and 6 cents cheaper than on this date in 2011, AAA said.
"Seventy-one percent of U.S. stations today are selling gas for less than $3.50 per gallon, while a year-ago it was seven percent," said AAA spokesman Michael Green in an email message.
In other markets, Brent crude, the benchmark for international crudes used by many U.S. refineries, slipped 32 cents to $108.32 a barrel on the ICE Futures exchange in London.
On the Nymex:
Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.
Copyright 2015 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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