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Oil Prices Drop Below $98 Per Barrel

Justin Sullivan/Getty Images

NEW YORK (AP) — The price of oil dropped below $98 per barrel Monday as investors continued to worry about Europe’s debt problems.

Benchmark crude fell $1.45 to $97.54 per barrel in New York, while Brent crude, used to price many international varieties, lost $2.21 at $111.95 per barrel in London.

The European debt crisis has yanked oil prices up and down for the past few months as traders assess whether massive debt burdens in Greece and Italy will mean bank failures and perhaps another recession. An economic slowdown across the region would mean weaker demand for oil.

Both countries have named economists as prime ministers, hoping they will shepherd them from the brink of default. Yet high interest rates on Italian bonds indicate a lack of confidence in the economy, according to PFGBest analyst Phil Flynn.

No matter what those political leaders do, “the European economy is going to slow down,” Flynn said.

U.S. stocks pulled back on Monday after last week’s rally. The major indexes were down about 1 percent in midday trading.

Retail gasoline prices fell half a cent on Monday to a national average of about $3.42 per gallon, according to AAA, Wright Express and Oil Price Information Service.

In other energy trading, heating oil was flat at $3.17 per gallon, and gasoline futures lost 7 cents at $2.53 per gallon. Natural gas fell 10 cents to $3.49 per 1,000 cubic feet.

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