OIL FALLS BELOW $89 PER BARREL

The price of oil dropped to near USD 89 a barrel today, its lowest level since mid-December, as a slowdown in China's growth added to doubts about the strength of the world economy and global demand for crude. By early afternoon in Europe, benchmark crude for May delivery was down USD 2.28 to USD 89.01 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the Nymex contract fell USD 2.22 to USD 91.29. China's slowdown, weak economic reports from the US and Europe's malaise suggest demand for crude and refined fuels won't be strong enough to absorb the ample supplies on the world market, which is pushing down oil prices. The Chinese government today said growth in the world's second-largest economy slowed to 7.7 per cent in the first quarter from 7.9 per cent in the final quarter of last year. Growth was expected to accelerate slightly after several quarters of decline. "Poorer-than-expected data from China has fuelled new fears about demand. On Friday, the US had already published disappointing retail sales figures," said a report from Commerzbank in Frankfurt. "In other words, demand in both of the leading oil consumer countries is currently weaker than anticipated." Still, oil consumption is expected to rise this year, even if at a slower pace than previously expected. "There is thus no fundamental explanation for the USD 10 price slide over the past two weeks, which is due above all to other factors such as market sentiment, short-term momentum, charts and selling by money managers," Commerzbank said. In London, Brent crude was down USD 1.79 to USD 101.25 a barrel on the ICE Futures exchange. In other futures trading on Nymex: Wholesale gasoline fell 1.91 cents to USD 2.791 a gallon. Heating oil dropped 2.44 cents to USD 2.8474 a gallon. Natural gas added 2.8 cents to USD 4.25 per 1,000 cubic feet.