NEW YORK (AP) — Oil slipped near $90 a barrel Monday as weak consumer spending in the U.S. and the lack of a resolution to the Greek debt crisis raised concerns about the health of the global economy.
Benchmark oil for August delivery lost 88 cents to $90.28 in early trading on the New York Mercantile Exchange.
The Commerce Department said Monday that consumer spending was unchanged in May, the worst result since September 2009. When adjusted for inflation, spending dropped slightly.
German Finance Minister Wolfgang Schaeuble warned Sunday that Greece will not receive its next tranche of international aid unless Greek lawmakers approve a $39.8 billion austerity plan on Wednesday.
In London, Brent crude for August delivery was down 99 cents to $104.13 a barrel on the ICE Futures exchange.
Crude fell sharply last week after the International Energy Agency said it will make 60 million barrels available over a 30-day period, half of which will come from the U.S. Strategic Petroleum Reserve.
This helped extend and accelerate a decline in U.S. retail gasoline prices. The nationwide average for retail gasoline fell to $3.57 per gallon Monday according to AAA, Wright Express and the Oil Price Information Service. Prices have dropped 24 cents in a month.
For drivers, this past weekend was the least expensive at the pump for drivers since March 26-27.
Still, gas is 81 cents higher than a year ago, when oil was around $78 per barrel. And some analysts said the recent price decline could be temporary.
"We doubt the world's energy supply will be solved by such a paltry sum," energy consultant Stephen Schork said in a report. "(The IEA's) move might assuage the market this summer, but it is by no means a long-term fix."
Others, however, noted that because other crude exporters like Saudi Arabia were maintaining crude output levels, supplies were likely to rise.
"The countries in the Gulf region apparently do not want to restrict production and this should mean a marked oversupply on the oil market in the coming weeks, which should push prices down further," said a commodity report from Commerzbank in Frankfurt.
Analysts also said oil prices were under pressure because speculators, seeking safer destinations for their money, have begun to back away from bets that prices will rise.
In other Nymex trading in July contracts, heating oil rose 1.4 cents to $2.783 a gallon while gasoline added 1.2 cents to $2.7804 a gallon. Natural gas futures dropped fractionally to $4.226 per 1,000 cubic feet.
Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.
Jonathan Fahey can be reached at twitter.com/JonathanFahey