Oil headed for biggest monthly drop since 2008

May 31, 2012 • Business

FILE- In this Tuesday, March 22, 2012 file photo, a pump jack is silhouetted against the setting sun in Oklahoma City. Oil is headed for its worst month since December 2008. A financial crisis in Europe and slowing growth in China and the U.S. likely mean demand won’t meet prior expectations. Oil fell 3 percent Wednesday and is down about 16 percent so far in May. (AP Photo/Sue Ogrocki, File)

NEW YORK (AP) — The price of oil is headed for its biggest monthly decline since December 2008.

Oil has dropped more than 16 percent so far in May, erasing all of its gains for the year. That’s helped lower gas prices and provided a little financial relief to cautious consumers.

Prices are falling on expectations that the world won’t use as much oil this year as previously thought. Europe’s financial crisis is the most immediate concern, but there have been plenty of signs of weaker demand. Benchmark U.S. crude fell $2.94, or 3.2 percent, on Wednesday to finish at $87.82. It’s now down 11 percent from Jan. 1.

Oil rose near $110 per barrel in February because of the potential for conflict between Iran and the West. Login to read more

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