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Oil Prices Drops on Global Uncertainty

Oil Prices Drops on Global Uncertainty

Oil prices have continued to fall amid uncertainty in the global market.  Economic slowdowns in China and the U.S. have reduced demand for oil as Europe continues to struggle with its long-term debt.

"Another round of European sovereign debt issues ... and bearish fundamentals

Oil prices have continued to fall amid uncertainty in the global market.  Economic slowdowns in China and the U.S. have reduced demand for oil as Europe continues to struggle with its long-term debt.

"Another round of European sovereign debt issues ... and bearish fundamentals have already started to weigh on oil prices," Morgan Stanley said in a research note. "If OPEC production continues at today's levels, stocks would build above normal through the third quarter and supply would outstrip demand in 2012."

With the market opening down on Monday, crude oil fell below $90. The price of oil has dropped 25 percent since April, offering some relief to businesses struggling to control costs, NBC reported. Oil is on track to have its biggest quarterly price drop since 2008. Companies and consumers are seeing the benefit of the reduced prices, as the trend is lowering the cost of a number of consumer goods. The Labor Department recently reported that the consumer-price index declined 0.3 percent in May, the largest drop since December of 2008.

Several factors are likely to prevent the cost of oil from sliding too much further. The continued unrest in the Middle East could potentially impact the global supply, and storms in the Gulf of Mexico could affect production at facilities along the Gulf Coast, which produce 20 percent of the United States' oil.

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