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Oil falls below $96 on economic worries

The Associated Press

NEW YORK (AP) -- The price of oil fell for a second day, as a major shipping company gave investors reason to question the strength of oil demand.

Benchmark crude closed down $1.33 to $95.29 Tuesday in New York, a drop of 1.4 percent. That followed Monday's decline of 2.4 percent, giving oil its biggest two-day percentage decrease in nearly two months.

FedEx Corp. lowered its outlook for global growth and industrial production when it reported fiscal first-quarter earnings. That has negative implications for energy demand. The world's No. 2 package delivery company forecast a continued slowdown in global trade.

Brent crude dropped $1.76 to $112.03 a barrel in London. Reports that Saudi Arabia is keeping production high to drive oil prices lower may have pressured Brent, which is the benchmark for many international crudes.

On Monday oil dropped more than 3 percent during a rapid sell-off that mystified traders. Some analysts suggested the price of oil had gotten too high given continued weakness in the global economy. The forecast from FedEx seemed to bolster that argument.

This week's drop has wiped out gains made last week when the Federal Reserve unveiled new steps to boost the U.S. economy.

In other futures trading in New York:

— Wholesale gasoline dropped 4.43 cents to finish at $2.899 per gallon.

— Heating oil slipped 3.63 cents to end at $3.1271 per gallon.

— Natural gas fell 9.2 cents to finish at $2.773 per 1,000 cubic feet.