Oil falls toward $106 despite Europe GDP growth


BANGKOK (AP) — The price of oil fell Wednesday, as traders responded cautiously to data showing that a stubborn recession in the 17-nation eurozone has ended.

Benchmark crude for September delivery was down 67 cents to $106.16 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 72 cents to close at $106.83 on Tuesday.

The European Union countries that use the euro saw their collective economic output grow by 0.3 percent in the April-June quarter from the previous quarter, according to data released Wednesday. That's the first quarterly growth rate since the eurozone slipped into recession in the final quarter of 2011. But the result came largely on the back of improving conditions in Germany and France, which had already escaped the most grueling effects of the recession.

The results are likely to be "cold comfort indeed to the remaining European countries that remain burdened down with negative growth, high levels of debt and steep unemployment," Michael Hewson, senior market analyst at CMC Markets, said in an email commentary.

A relatively stronger dollar also worked against oil prices. Oil is traded in dollars and becomes a less attractive investment for holders of other currencies when the value of the greenback rises.

In recent days, the dollar has posted gains against the Japanese yen, the Swiss franc, and the currencies of commodity-driven countries including Australia and Canada, said Hewson. That could partly explain the falling price of oil in the face of the brighter economic data from Europe and the U.S.

Brent crude, traded on the ICE Futures exchange in London, fell 64 cents to $109.18 a barrel.

In other energy futures trading on Nymex:

— Heating oil fell 1.4 cents to $3.033 a gallon.

— Wholesale gasoline fell 1.4 cents to $2.805 a gallon.

— Natural gas rose 3 cents to $3.315 per 1,000 cubic feet.