Oil fell for a third straight day Thursday, and finished October with a second consecutive monthly decline.
Lower oil prices contributed to this week’s drop in U.S. pump prices to their lowest level of the year.
Benchmark U.S. crude for December delivery fell 39 cents to close at $96.38 a barrel on the New York Mercantile Exchange. For the month, oil dropped $5.95 a barrel, or 5.8 percent.
Ample supplies of oil have weighed on the price. The Energy Department said this week that U.S. supplies increased 4.1 million barrels last week. Over five weeks, supplies have risen by more than 25 million barrels, suggesting muted demand.
The outcome of a two-day meeting of the Federal Reserve’s policy committee added to the pressure on oil prices. The central bank’s positive tone on the economy indicated that it might be prepared to slow its bond purchases by early next year, sooner than some have assumed.
The withdrawal of stimulus would result in higher interest rates and a stronger U.S. dollar, making oil more expensive for holders of other currencies.
At the gas pump, the price of a gallon stayed at $3.28, the lowest level since late December, according to AAA and Oil Price Information Service. The nationwide average dropped 12 cents in October, and has fallen 31 cents since Labor Day. Drivers are paying 24 cents less than at this time last year.
AAA forecast Thursday that the U.S. average could drop to $3.10 before the year ends, with up to 10 states seeing average prices below $3.00.
“Expect a nice (year-end) bonus in the form of much cheaper gas prices,” said AAA spokesman Avery Ash in a statement.
Brent crude, a benchmark for international crude also used by U.S. refineries, fell $1.02 to $108.84 on the ICE exchange in London.
In other energy futures trading on Nymex:
- Wholesale gasoline fell 2 cents to $2.63 a gallon.
- Heating oil shed 1 cent to $2.97 a gallon.
- Natural gas lost 4 cents to $3.58 per 1,000 cubic feet.