Oil prices retreated Tuesday on concerns about growing supplies of crude in the U.S. and weak retail sales numbers that suggested consumers were spending less because of high energy prices.
Benchmark West Texas Intermediate crude fell 49 cents to settle at $84.32 a barrel on the New York Mercantile Exchange. In London, Brent crude fell $1.44 to settle at $102.29 a barrel on the ICE Futures exchange.
The Commerce Department said retail sales rose in January, but it was the smallest increase since June and only half what analysts expected. Some experts think consumers may be pulling back on spending as they pay more for essentials like gasoline.
The SpendingPulse U.S. Gasoline Demand Report for last week showed a 3 percent drop in consumption compared to the week before. Analyst Paul Crafts noted that the drop is significant and coincides with the rise in gas prices. Gas pump prices have climbed steadily since November and stayed above $3 a gallon across much of the country for weeks.
The national average for a gallon of regular was $3.124 Tuesday, according to AAA, Wright Express and the Oil Price Information Service. That’s almost 51 cents more than a year ago.
U.S. stockpiles of crude oil continue to rise, undercutting the price of benchmark WTI. The Energy department releases its weekly report on petroleum supplies on Wednesday. Analysts expect it to show increases in supplies of both oil and gasoline, according to Platts, the energy information arm of McGraw-Hill Cos. Oil supplies have been growing for weeks at the Cushing, Okla., hub, which is the delivery point for WTI crude.
Energy traders also kept an eye on anti-government protests that continued in Iran and Bahrain after Egypt’s president was forced from power last week. Demonstrations have happened in Yemen and Algeria as well. There is concern that unrest could spread to other countries and disrupt oil shipments from OPEC countries. Iran is the second-largest oil exporter in the Organization of Petroleum Exporting Countries behind Saudi Arabia.