Oil drops on decline in retail spending

NEW YORK — Oil prices slipped below $90 per barrel Wednesday as the latest government data showed Americans keeping a tighter grip on their wallets.

The Commerce Department reported Wednesday that consumers spent less on autos, clothing and furniture last month. Consumer spending drives the U.S. economy, and a decline in retail spending suggests Americans will continue to consume less fuel.

Overall, retail sales were flat in August. That was a surprise, given a slew of private market reports from auto dealers and retailers that sales were up last month.

Benchmark West Texas Intermediate crude gave up $1.42 to $88.79 per barrel in New York while Brent crude lost 75 cents to $109.02 in London.

Also on Wednesday, the government reported that oil supplies fell more than twice as much as expected last week while gasoline supplies rose. U.S. supplies were impacted earlier this month as Tropical Storm Lee temporarily shut down oil production in the Gulf of Mexico.

The Energy Information Administration reported that wholesale gasoline demand dropped 2.7 percent as gasoline prices rose. Pump prices hit

$3.634 per gallon overnight. A gallon of regular unleaded is 91.7 cents higher than it was the same time last year.

In other commodities trading, heating oil fell 1.01 cents to $2.926 per gallon and gasoline futures dropped 3.6 cents to $2.7064 per gallon. Natural gas added 6 cents to $4.04 per 1,000 cubic feet.