Oil prices fall as Japan says economic growth fell in the second quarter

The price of oil fell Monday on a new sign that Asian countries won’t make up for slackened oil demand in Europe.

Japan says its economy grew less than expected in the second quarter. Consumer spending, which makes up more than half the country’s economic activity, fell and export demand was anemic.

Economies in China, a huge importer of oil, India and other Asian countries also have slowed. That is worrisome because the Asia-Pacific region helped carry the global economy when the U.S. and Europe began to slow.

The Japan news comes after the International Energy Agency last week cut its global oil demand forecast for the year, citing “a weak economic backdrop.”

Benchmark oil fell 14 cents to finish at US$92.73 a barrel in New York. Brent crude, used to price international varieties of oil, rose 65 cents to end at US$113.60 a barrel in London.

Brent is likely getting support from traders concerned about supply disruptions from the Middle East because of the potential for a regional conflict. That could affect shipments through the Strait of Hormuz, through which about one-fifth of the world’s oil travels.

In other futures trading on the New York Mercantile Exchange, heating oil fell less than a penny to US$3.02 a U.S. gallon (3.79 litres), gasoline fell 1.32 cents toUS$2.99 a gallon and natural gas fell four cents to US$2.73 per 1,000 cubic feet.

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