Oil prices retreated Monday as concerns grew about economic stability in Europe after Ireland sought billions of dollars in financial assistance from its neighbors.
Benchmark crude for January delivery fell 24 cents to settle at $81.74 a barrel on the New York Mercantile Exchange. The price has dropped about 5 percent from a week ago in the wake of Ireland's debt crisis and China's efforts to slow economic growth.
Meanwhile, the national average for a gallon of regular gasoline was $2.876 on Monday, according to the Energy Department's Energy Information Administration. That's almost 2 cents less than a week ago and about 24 cents more than a year ago. Drivers in Gulf Coast states are seeing the lowest prices, at an average $2.694 a gallon. California gas stations charge the most: around $3.17 a gallon.
Pump prices in major cities range from an average of $2.66 a gallon in Houston to $3.21 a gallon in San Francisco. Drivers in New York City pay about $3.01 a gallon. Regular goes for $3.08 in Chicago, $2.95 in Boston, $2.94 in Miami and $2.68 in Denver.
Ireland formally requested help Sunday from other countries in the European Union after a financial crisis developed with losses at three nationalized banks. Terms of the package from the European Union and the International Monetary Fund are being negotiated but should not exceed $137 billion.
Ireland's action follows a multi-billion dollar European bailout approved in May for Greece to prevent it from defaulting on its debt. Now, traders and investors are concerned that heavy debt burdens in Spain, Portugal and Italy may lead to other bailout packages, slower global economic recovery and weak demand for oil and gas. Some traders are selling contracts to reduce their risk ahead of the Thanksgiving holiday weekend.
Efforts by China to tighten its monetary policy, with things like higher bank reserve requirements, also weighed on energy prices. China's rampant growth and thirst for energy have driven oil prices higher even as economies in the U.S. and Europe have been sluggish.
"Certainly things can unfold in the eurozone very quickly," LaSalle Futures Group analyst Matt Zeman said. "Things can happen in China very quickly. Why take that risk home with you over the long weekend?"
Trading was light Monday, which can contribute to volatility in price swings. In addition, the dollar was stronger against other currencies. Since oil and other commodities are priced in dollars, a stronger dollar makes them less of a bargain for traders using other currencies.
In other Nymex trading in December contracts, heating oil fell 0.58 cent to settle at $2.2686 a gallon, gasoline lost 4.41 cents to settle at $2.1519 a gallon. Natural gas added 10.7 cents to settle at $4.271 per 1,000 cubic feet.
In London, Brent crude lost 38 cents to settle at $83.96 a barrel on the ICE Futures exchange.