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Oil falls on China inflation concerns

Associated Press / July 12, 2011

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NEW YORK - The latest readings on Chinese inflation and renewed worries about European debt pushed oil lower.

Benchmark West Texas Intermediate crude fell $1.05 to $95.15 per barrel yesterday on the New York Mercantile Exchange. Brent crude dropped $1.09 to $117.24 per barrel on the ICE Futures exchange in London.

Oil started falling after a weekend disclosure that inflation in China hit a three-year high in June. China has been raising interest rates in an attempt to control inflation and cool off its economy, but on Saturday the government said consumer prices continued to increase, jumping 6.4 percent last month.

Rising consumer prices will heap even more pressure on the country’s expanding economy, and that could affect energy demand. Oil has been climbing on the expectation that China will drive world oil demand.

AAA Southern New England reported yesterday that a gallon of self-serve, regular climbed to an average of $3.67 in Massachusetts.