Covering The Economy

Nov 20, 2012 12:58 PM

Oil Prices Fall On Hopes Of Peace In Middle East

NEW YORK (AP) - The price of oil fell sharply Tuesday on signs that Israel and Hamas are close to putting a halt to fighting that has lasted nearly a week.

A senior Hamas official said his group is close to a cease-fire with Israel.

Secretary of State Hillary Rodham Clinton was on her way to the Middle East to meet with leaders of the two sides and encourage a peace deal. The trip marks the most direct U.S. engagement in the conflict.

Benchmark crude fell $3.06, or 3.4 percent, to $86.22 a barrel in early afternoon trading. That wiped out a gain of 2.7 percent from Monday, when oil closed above $89 per barrel for the first time since Oct. 19.

Brent crude, which is used to price international varieties of oil, fell $2.48, or 2.2 percent, to $109.22 a barrel in London.

Other futures on the New York Mercantile Exchange:

- Heating oil fell 5 cents to $3.04 a gallon.

- Wholesale gasoline fell 7 cents, or 2.4 percent, to $2.69 per gallon.

- Natural gas rose 8 cents, or 2.1 percent, to $3.92 per 1,000 cubic feet.

(Copyright 2012 The Associated Press. All rights reserved.)

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