Oil price retreats to near $85 per barrel as ample supplies surpass demand

BANGKOK – Ample supplies helped send oil prices down to near $85 per barrel on Friday.

Benchmark oil for December delivery was down 80 cents to $85.25 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. Oil hasn't been that low since July 10, when the contract closed at $84.02.

The contract rose 32 cents to finish at $86.05 a barrel in New York on Thursday, the only day this week that oil prices have risen.

Brent crude fell 79 cents to $107.70 a barrel in London.

Analysts said the recent fall in oil prices can be partly attributed to ample supplies. Oil has dropped more than 7 percent in the past week.

The Energy Department said Thursday that U.S. oil supplies grew last week by 5.9 million barrels, or 1.6 percent. At 375.1 million barrels, the nation's oil inventory is 11.1 percent above year-ago levels.

"I think that's all about a scenario of more than adequate supply for the current demand level," said Ric Spooner, chief market analyst at CMC Markets in Sydney.

Traders were looking ahead to Friday's report on U.S. gross domestic product for the third quarter. Analysts are estimating that the U.S economy grew 1.8 percent. A level significantly lower than that would be negative for oil consumption prospects.

"If it is significantly weaker than that, and there is a chance of that ... that would be a little bit disappointing in terms of people's demand outlook," Spooner said.

In other energy futures trading in New York:

— Natural gas fell 1.7 cents to $3.417 per 1,000 cubic feet.

— Wholesale gasoline fell 1 cent to $2.622 a gallon.

— Heating oil fell 1.1 cents to $3.035 a gallon.