Economic Jitters Pressure Oil

Crude is down $2.21 at $91.99 a barrel.
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Crude oil futures were sliding Tuesday on a combination of negative domestic economic news and a signal by Saudi Arabia's oil minister that OPEC might increase supplies to help head off a U.S. recession.

Oil was recently trading down $2.21 at $91.99 a barrel on the New York Mercantile Exchange. Reformulated gasoline slid 5 cents to $2.32 a gallon, and heating oil was 3 cents lower at $2.56 a gallon.

Natural gas futures were off 8 cents at $8.28 per million British thermal units.

Crude futures were sent lower partly by a new retail sales report that saw the core and headline December numbers each fall by 0.4%. The November data were revised downward, as well.

According to a research note by Joseph Brusuelas, chief economist at IDEAglobal, the figures suggest that U.S. consumers are tightening their wallets in expectation of worsening economic conditions ahead.

Stephen Schork, principal at the Schork Group, says that traders are no longer paying attention to worries about global hot spots and are instead focused on a weakening U.S. economy.

"The recent geopolitical tensions in Iran and Nigeria would have sent oil screaming higher three months ago," he said. "This week they've been met by a collective yawn. The market is now focused on the potential for a major slowdown in the U.S. economy."

Elsewhere, a statement by the Saudi oil minister also dented crude prices. Ali al-Naimi told reporters in Riyadh that "We will raise production when the market justifies it."

While his remarks provided no guarantees of a supply increase, it did indicate his confidence that OPEC still has some excess capacity that it could provide to global markets in the event of a major supply crunch.

Meanwhile, energy stocks were broadly lower.

Exxon Mobil

(XOM) - Get Report

fell 1.5% to $89.51 a share.

BP

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lost 2.4% to $68.58, and

Chevron

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was lower by 1.3% to $89.70.