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TheStreet Open House

Oil Falls Toward $86 On Economy Gloom

By PAMELA SAMPSON

BANGKOK (AP) â¿¿ The price of oil rose past $87 a barrel Thursday in Asia, staging a modest comeback following a sharp sell-off the day before.

Benchmark oil for May delivery was up 72 cents to $87.40 per barrel at late afternoon 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 â¿¿ the fourth daily drop of at least 2 percent in April.

A report released by the American Petroleum Institute showed 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.

Economic reports from Europe this week were dire, causing crude to slump badly on Wednesday. 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.

In London, Brent crude, which is used to price oil used by many U.S. refiners, rose $1.15 to $98.84.

In other energy futures trading on Nymex:

â¿¿ Heating oil rose 3.4 cents to $2.769 a gallon.

â¿¿ Natural gas fell 2.4 cents to $4.19 per 1,000 cubic feet.

â¿¿ Gasoline rose 2.9 cents to $2.75 per gallon.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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