Oil prices fell below $57 a barrel Thursday as U.S. unemployment continued to rise and a new report suggested the world's petroleum appetite would shrink even more than expected this year.
Benchmark crude for June delivery fell 65 cents to $57.37 a barrel on the New York Mercantile Exchange. Prices fell as low as $56.55. In London, Brent prices fell 57 cents to $56.77 a barrel on the ICE Futures exchange.
Natural gas futures also fell ahead of a government report that's expected to show another build in U.S. inventories. Stores of natural gas, a major energy source for power plants, have been building since mid-March as factories shut down and people lose jobs.
That has all led to energy prices that have recently neared five- to seven-year lows. But refiners have slashed production of gasoline in anticipation of fewer sales.
That's part of the reason retail gasoline prices are hitting new highs on the year, even as crude prices fall. The price of gasoline futures was the only thing going up Thursday at Nymex, which will likely show up at the local gas stations soon.
Retail gas prices rose to a new national average of $2.281 a gallon overnight, according to auto club AAA, Wright Express and Oil Price Information Service. That's about 23 cents more per gallon than last month, but still about $1.48 cheaper than a year ago.
Energy prices dropped early in the day as the Paris-based International Energy Agency said it now expects global oil consumption to fall 3 percent in 2009, or about 2.6 million fewer barrels a day than last year.
It was the ninth consecutive monthly cut the IEA has made to its forecasts.
The U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries already cut demand expectations this week.
Meanwhile, the U.S. Labor Department reported that new jobless claims rose to a seasonally adjusted 637,000 last week - above analysts' expectations of 610,000 - while continuing jobless claims jumped to 6.56 million from 6.36 million, also higher than analysts expected.
In other Nymex trading, gasoline for June delivery gained less than a penny to $1.6939 a gallon and heating oil lost less than a penny to $1.4819 a gallon. Natural gas for June delivery dropped 16.8 cents to $4.165 per 1,000 cubic feet.
