Oil prices fall after disappointing US economic news, demand concerns

The price of oil fell 2.2 per cent Friday after disappointing U.S. corporate earnings and a drop in existing home sales again sparked worries about the economy.

Benchmark West Texas Intermediate crude fell $2.05 to finish at US$90.05 a barrel in New York. Brent crude, which is used to price international varieties of oil, dropped $2.28, or two per cent, to end at US$110.14 a barrel in London.

Several companies delivered weaker than expected third-quarter results, including Microsoft and McDonald’s. In addition, the U.S. National Association of Realtors said sales of previously occupied homes fell 1.7 per cent in September from August in part because of fewer houses on the market.

Oil traders also worry about Europe’s efforts to resolve its debt crisis and China’s slower growth.

Meanwhile, TransCanada said it will restart a pipeline this weekend that carries crude from Alberta to the U.S. Midwest. The 3,380-kilometre Keystone pipeline was shut down Wednesday after tests showed possible safety issues.

Oil traders largely consider the temporary closure to be a non-issue because U.S. crude supplies are plentiful. Analysts don’t expect any impact on national retail gasoline prices.

In other energy futures trading in New York, heating oil fell five cents to finish at US$3.13 a U.S. gallon (3.79 litres), wholesale gasoline fell five cents to finish at US$2.70 a gallon, while natural gas rose three cents to finish at US$3.62 per 1,000 cubic feet.