International oil prices fell Tuesday on disappointing corporate earnings in the U.S. and doubts that European leaders can agree on a plan to resolve that region's debt crisis.
The price of Brent, which is used to price oil imported into the U.S., fell 53 cents to end the day at $110.92 per barrel.
Meanwhile, gasoline prices in the U.S. fell less than a penny overnight to a new national average of $3.446 a gallon. Gasoline prices have dropped about 50 cents since the spring, and motorists could see them slide another 20 cents before the end of the year. That's because people drive less in the fall than in the summer, and refineries produce winter fuel blends that are less expensive to make.
"There's a lot of relief at the pump," said Patrick DeHaan, a senior petroleum analyst at GasBuddy.com. DeHaan expects pump prices to fall to as low as $3.25 per gallon by the end of the year.
Another key variety of crude saw higher prices on Tuesday. Benchmark U.S. crude — known as West Texas Intermediate — is now at its highest level since early August. The price is up partly because of a complicated trading strategy under which energy traders sell Brent and buy WTI to make money on the price difference.
WTI on Tuesday rose $1.90, or 2.1 percent, to finish at $93.17 a barrel in New York.
A sustained rise in WTI could eventually push gasoline prices higher, but analysts say that's not likely. U.S. refineries rely more on Brent than WTI, and Brent prices are falling. Also, compared with last year, motorists are buying much less gasoline, even for the fall. MasterCard SpendingPulse, which tracks retail gasoline purchases in the U.S., says drivers have cut back at the pump for nearly eight months in a row.
MasterCard's latest survey, which was released Tuesday, said motorists bought 61.8 million barrels of gasoline last week, 2.8 percent less than the same period last year. . Experts say motorists are cutting back because they can't afford to buy more. Prices flirted with $4 per gallon in May, and a gallon of regular is still about 63 cents higher than it was a year ago.
Overall, gasoline is expected to average at $3.52 per gallon this year, a record high for the average price.
In other energy trading, heating oil was essentially flat, ending at $3.0502 per gallon and gasoline futures added 1.1 cents to finish at $2.6998 per gallon. Natural gas rose 5.4 cents to finish at $3.658 per 1,000 cubic feet.
In corporate news, manufacturing conglomerate 3M cut its 2011 earnings forecast, and U.S. Steel warned that demand for its products could slow. Netflix Inc. shares plunged after the company cut its profit forecast and said it is losing subscribers following a price increase in July.
Investors are also concerned about whether European leaders can agree on a comprehensive solution for the region's debt crisis in time for a summit Wednesday.
European officials are working to patch together a plan that will prevent banks from taking huge losses if the Greek government defaults on its bonds. A messy default could lead to a credit freeze-up similar to the one in 2008 following the fall of Lehman Brothers.
Copyright 2011 The Associated Press.