Oil falls towards $86 on economic gloom

The price of fell to near $86 a barrel Thursday in Asia after economic data from Europe suggested global demand for energy will remain subdued, according to AP. Benchmark oil for May delivery was down 20 cents to $86.48 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped $2.04, or 2.3 percent, to close at $86.68 in New York on Wednesday - the fourth daily drop of at least 2 percent in April. Economic reports from Europe this week were a disappointment. Germany reported a drop in investor confidence, France cut economic growth forecasts, and unemployment rose in Britain. On top of that, the International Monetary Fund lowered its outlook for world economic growth this year to 3.3 percent from 3.5 percent. The gloom began Monday, when a report of slower-than-expected economic growth in China helped trigger a broad sell-off in commodities that included the biggest one-day drop in the price of gold in 30 years. Ample crude supplies globally made it easy for investors to set aside the latest data from the American Petroleum Institute showing a drop in U.S. inventories for the week ending April 12. Supplies fell by 354,000 barrels from the prior week to 384.1 million barrels. A drop in supplies can be due to higher demand but the week to week data is volatile. In London, Brent crude, which is used to price oil used by many U.S. refiners, was down 18 cents to $97.51. In other energy futures trading on Nymex: - Heating oil rose 1.1 cent to $2.746 a gallon. - Natural gas fell 2.2 cents to $4.192 per 1,000 cubic feet. - Gasoline fell 0.2 cent to $2.719 per gallon.