Oil prices fall after warning from World Bank


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The Independent Online

A strong warning from the World Bank that growth in Asia may slow further dragged down the price of oil today.

The World Bank signaled the possibility of a "more pronounced slowdown" in China, the world's second largest economy after the United States. It also cut its growth forecast for Asia. Red-hot growth in emerging markets like China and India helped boost oil consumption coming out of the global recession. 

Benchmark crude fell 30 cents to $89.58 (£56) in morning trading in New York. The contract hasn't closed lower since the 2 August. 

At the pump, gas prices remain stubbornly high. The national average for gasoline rose 3 cents over the weekend to $3.818 a gallon. But Californians are now paying an average of $4.668 a gallon, the highest price in the nation, after a jump of 40 cents in the past week. Some motorists there are paying over $5. 

In response, Gov. Jerry Brown has ordered state smog regulators to allow cheaper winter-blend gas to be sold three weeks early in the state. And Sen. Dianne Feinstein has called for a federal investigation because she doesn't think the higher prices are related to supply and demand. 

Experts are predicting prices in California could climb to an average of $4.85 before coming down. 

In London, Brent crude, which is used to price international varieties of oil, fell 8 cents to $111.94. 

Other futures in morning trading: 

* Natural gas fell 4 cents to $3.36 per 1,000 cubic feet. 

* Heating oil gained a penny to $3.17 per gallon. 

* Wholesale gasoline was flat at $2.95 per gallon.