Oil Futures Drop Below $87

Crude oil futures fell $1.29 per barrel on Thursday on the New York Mercantile Exchange to close at a seven-month low of $86.53. The decline capped a 17% tumble in oil futures in May.

Analysts attribute the latest drop to news that the U.S. economy grew more slowly than expected in the first quarter, which could lead to lower energy demand in coming months. Also, the dollar hit a fresh 22-month high against the euro amid rising worries about the stability of the European Union. A strong dollar makes oil cheaper in dollar-denominated terms.

The U.S. Energy Information Administration reports that domestic oil stockpiles unexpectedly rose to a 22-year high of 384.7 million barrels last week.

U.S. gasoline prices dipped one cent overnight to $3.62 per gallon, down six cents from a week ago and 19 cents lower than a month ago, according to the AAA Daily Fuel Gauge Report.