NEW YORK (AP) - Oil prices tumbled to near $79 a barrel Monday, dragged down by a stronger dollar and increasing investor concerns about energy demand.
Energy prices fell across the board, with benchmark crude contracts for April delivery sliding $1.65 to $79.59 a barrel on the New York Mercantile Exchange. Earlier, crude dipped as low as $79.16. It's been nearly two weeks since prices dropped below $80.
MF Global analyst Mike Fitzpatrick said, "A great deal of skepticism is creeping into the market about the sustainability of a market recovery," which has fueled concerns that consumers will keep their cars parked and watch their energy use closely.
Adding downward pressure to demand, Fitzpatrick said energy markets have been hampered by a "slack demand season" as the heating season draws to a close and the summer driving season has not yet begun.
Even so, motorists face steeper pump prices. While many analysts predict a peak of $3 per gallon, Fitzpatrick believes drivers could pay as much as $3.25 a gallon.
Prices rose again today, extending five consecutive days of retail gasoline price hikes. The nationwide average climbed a penny to $2.790 per gallon according to AAA, Wright Express and Oil Price Information Service.
Gasoline prices have risen 16.2 cents in the last month and are now 88.2 cents higher than levels of a year ago.
The government's report on retail gasoline prices for last week comes out later Monday.
Meanwhile, investors will be eyeing this week's Federal Reserve meeting for signs of when policymakers may start raising interest rates.
Also on the schedule is OPEC's midweek meeting at its Vienna headquarters, although analysts have few expectations of market-moving news from the world's key oil exporters.
In other Nymex trading in April contracts, heating oil fell 3.55 cents to $2.0585 a gallon, and gasoline dropped 3.83 cents to $2.2167 a gallon. Natural gas slipped by 0.4 cent to $4.393 per 1,000 cubic feet. It hit a new 52-week low of $4.334 in earlier trading.
In London, Brent crude was down $1.63 at $77.76 on the ICE futures exchange.
Associated Press writers Pablo Gorondi in Budapest, Hungary, Alex Kennedy in Singapore and Nasser Karimi in Tehran contributed to this report.
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