Oil slips below $100 a barrel in largest single day decline in six months

The price of oil registered the largest one day decline in nearly six months yesterday, dropping to less than $100 per barrel for the first time since February. Analysts say petrol prices would also drop soon.

Motorists would no doubt welcome the downtrend, with the summer driving season coming up, but so would others as it would lead to a general easing of pressure on the US economy, which has been growing at a glacial pace over much of the nearly three year period since the Great Recession ended.

Oil was down $4.05, or 4 per cent, to $98.49, after a weak US jobs report came as another piece of evidence of the global economic slowdown, which possibly hurt demand for oil. However, there is mounting evidence of growth in world oil supplies.

Over the week, oil was down over $6 and presently rules at $12 below its February high. US gasoline prices are down to $3.80 per gallon from a peak of $3.94 in early April.

The prices are expected to fall to $3.50 per gallon by 4 July, according to Tom Kloza, chief oil analyst at the Oil Price Information Service.

The oil market picture has reversed in a few months say analysts. Earlier, world oil demand seemed to be rising quickly even as world supplies came under threat due to a number of small production outages and the potential massive production cuts from Iran, the world's third-biggest exporter.