Oil prices end first losing quarter since late ‘08 amid economic uncertainty

Oil ends first losing quarter since late ‘08

Oil prices dropped slightly Wednesday and closed out their first losing quarter since the final three months of 2008.

The biggest factor in the decline was concern about the various leaks that sprung in the global economic recovery. Europe’s financial crisis, signs of slowing growth in China and eroding consumer confidence in the U.S. all flashed warnings signs about energy demand. BP’s oil spill in the Gulf has little impact on prices.

Oil dropped 9.7 percent from the end of the first quarter, when it traded at $83.76. As a result, drivers got a pleasant surprise: gasoline prices fell instead of rising ahead of the busy summer driving season. The average price of a gallon of gas declined to $2.755 from $2.798. Most analysts had expected a run up above $3 by July 4.

Gasoline prices were flat Wednesday as cautious consumers weigh a vacation trip against economic worries. Prices rose about 1.4 cents from a week ago and are up 12.2 cents from a year ago, according to Wright Express and Oil Price Information Service.

Demand for gasoline remains weak and inventories are still higher than a year ago amid the recession. Americans continue to worry about jobs and the pace of the economic recovery.

AAA expects the number of travelers out for the long weekend to rise 17 percent from a year ago. Nearly 35 million people will travel at least 50 miles from home.

“The U.S. consumer doesn’t really appear to be one going back on the road and really driving and taking vacations at a high level,” analyst Addison Armstrong said. “The ones who are driving aren’t that bothered by prices at the pump.”

Gasoline inventories rose by 500,000 barrels last week to 218.1 million barrels, according to the Energy Department’s Energy Information Administration. In the past four weeks, gasoline demand has averaged 9.3 million barrels a day, an increase of about 1.5 percent from the year-ago period.

Oil prices, too, were little changed as supplies fell 2 million barrels last week to 363.1 million barrels, according to the EIA.

Benchmark crude for August delivery fell 31 cents to settle at $75.63 a barrel on the New York Mercantile Exchange. The price has ranged between $75 a barrel and $78 a barrel for about a month.

In other Nymex trading in July contracts, heating oil fell 3.96 cents to settle at $1.9817 a gallon and gasoline lost 1.14 cents to $2.0606 a gallon. August natural gas rose 6.8 cents to $4.616 per 1,000 cubic feet.

Brent crude fell 43 cents to settle at $75.01 a barrel on the ICE futures exchange.

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Associated Press writers Alex Kennedy, Natalie Ragus and Chris Kahn contributed to this report.