Oil prices slide on fresh global economic concerns

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Oil prices fell for a third consecutive day as disappointing U.S. economic news added to global concerns about Ireland's ongoing debt problems and the prospect of higher inflation in Asia.

Benchmark oil for December delivery fell $2.36 to $82.50 a barrel in early trading Tuesday on the New York Mercantile Exchange as traders weigh how the global issues could affect demand for crude.

Meanwhile, pump prices inched higher overnight to a national average of $2.893 a gallon for unleaded regular gasoline, according to AAA, Wright Express and Oil Price Information Service. The price is about 6 cents higher than it was a month ago and 26 cents more than a year ago.

Retail gas prices jumped 9.8 percent in October, and diesel and home heating oil costs also rose, contributing to a 0.4 percent increase in the Producer Price Index, the Labor Department said. Yet, there was little sign of inflation as the cost of food, cars and computers fell.

Excluding the volatile food and energy categories, the so-called core index fell by 0.6 percent, the most in more than four years, primarily because of lower prices for new cars and trucks.

The report supports the Federal Reserve's belief that inflation remains low because of sluggish growth. That view prompted its multi-billion bond-buying program in an effort to push interest rates lower and help stimulate the economy.

Concern about Ireland's impact on Europe's economic recovery was at the top of the agenda for a meeting of finance ministers Tuesday. Earlier this year, a debt crisis in Greece and other European countries contributed to a sharp drop in oil prices.

It's the opposite situation in Asia, where countries are trying to control rapid growth. South Korea's central bank raised interest rates to curb growing inflation. That comes amid speculation that China will take a similar step to control growth. Slower economic growth in those nations could pressure oil prices because of the potential for diminishing demand.

"The economic bad news has been sort of giving us water torture, you know, a drip from Ireland, a drip from China, a drip off from producer prices," said Michael Lynch, president of Strategic Energy & Economic Research. "It's making people feel like the run-up in oil prices was overdone."

Oil rose about 23 percent from the end of August through last Thursday, hitting a two-year high above $88 along the way.

In other Nymex trading in December contracts, heating oil fell 5.35 cents to $2.3174 a gallon, gasoline lost 4.64 cents to $2.1486 a gallon and natural gas fell 2.4 cents to $3.824 per 1,000 cubic feet.

In London, Brent crude gave up $1.45 cents to $85.25 a barrel on the ICE Futures exchange.