NEW YORK — Oil fell Friday to its lowest level of the year on worrisome economic developments in the world's two largest oil-consuming nations.
Oil dropped close to $90 a barrel as the prospect of U.S. government spending cuts raised concerns about oil demand in the world's leading economy. In addition China's manufacturing grew at its weakest rate in five months in February.
The price of crude fell 1.5 percent and is down 6 percent in two weeks
Benchmark crude for April delivery fell $1.37 to close at $90.68 a barrel on the New York Mercantile Exchange. Oil last closed below $91 in New York on Dec. 28.
While there have been signs of an improving U.S. economy in recent weeks, attention Friday was focused on the increasing likelihood that about $85 billion in spending cuts could start taking effect later in the day as part of an earlier budget agreement between the White House and Congress.
The International Monetary Fund has predicted that the spending cuts could reduce U.S. growth by some 0.5 percentage point in 2013.
In China two surveys showed that manufacturing growth slowed last month, as demand faltered and factories shut down for the Lunar New Year holiday.
Brent crude, used to price many kinds of oil imported by U.S. refineries, fell 98 cents to finish at $110.40 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
- Wholesale gasoline rose 2 cents to end at $3.13 a gallon.
- Heating oil lost 3 cents to finish at $2.93 a gallon.
- Natural gas fell 3 cents to end at $3.46 per 1,000 cubic feet.
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