BANGKOK -- The price of oil slipped back below $97 a barrel Tuesday after a sharp rise the day before as supply remains ample and demand tepid.
Benchmark oil for March delivery was down 30 cents to $96.70 at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract on Monday gained $1.31 to finish at $97.03 a barrel on the Nymex as the euro strengthened against the dollar.
A strong euro tends to result in higher oil prices by making crude priced in dollars cheaper for traders using currencies other than the greenback.
On Friday, new figures showed the U.S. trade deficit fell nearly 21 percent in December from November, the smallest trade deficit in nearly three years, due largely to plunging oil imports. Production of oil is surging in the U.S., weighing on the price of U.S. crude oil.
"Our exports of oil products jumped by $10 billion last year and will more than likely see bigger improvements this year. We're bringing in less crude from other countries," Carl Larry, president of Oil Outlooks and Opinions, said in a market commentary. "It's all good for the US, but we're getting high on our own supply and keeping it cheap. This means there's less demand for crude wherever we can send our cheap cargoes."
In London, Brent crude, used to price international varieties of oil, fell 5 cents to $117.16 a barrel on the ICE Futures exchange.
In other energy futures trading on the Nymex:
-- Wholesale gasoline rose 0.8 cent to $3.029 a gallon.
-- Natural gas fell 1 cent to $3.269 per 1,000 cubic feet.
-- Heating oil was down 0.1 cent at $3.233 a gallon.