The price of oil dropped three per cent Thursday on expectations of higher global supplies and the impact of a strengthening US dollar.
U.S. benchmark oil for February delivery fell $2.98 to close at $95.44 US a barrel on the New York Mercantile Exchange. It was the biggest one-day drop in crude since November 2012.
Oil was lower for the third straight day after closing above $100 a barrel Friday for the first time since October. Oil had risen because an improving U.S. economy lifted consumption and a spell of cold weather seemed to augur higher demand.
The recent retreat follows reports that an end to protests at a major Libyan oilfield could return 300,000 barrels of daily production to the global market. That has raised expectations that supplies will be ample.
"Further improvement in the U.S. economy should be supportive of the U.S. dollar and that will continue to play against oil demand in emerging markets," said Olivier Jakob, an analyst at Petromatrix in Switzerland. He highlighted recent protests in Kuala Lumpur, Malaysia, against rising gasoline prices.
CBCNews.ca - Oil price plunges 3% to $95 US a barrel