Oil drops on downbeat outlook for Europe's economy

Oil prices fall as European Central Bank cuts forecast for European economy in 2013

Associated Press

The price of oil is dropping after the European Central Bank gave a downbeat assessment of the region's economy.

Benchmark oil fell $1.89, or 2.2 percent, Thursday to $85.99 per barrel in New York. Brent crude fell $1.51 to $107.30 per barrel in London.

The ECB is leaving its key interest rate unchanged at a record low and cutting its 2013 growth forecast to negative from positive. The decision comes as the 17 countries that use the euro currency are in a recession.

Europe's problems have hurt global economic growth. That can lead to less demand for energy products.

At the pump, AAA says the average retail price of gasoline was flat at $3.38 per gallon. That's nearly 11 cents more than a year ago.

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