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Price of oil is lowest this year; European elections have negative effect

The price of oil hit its lowest level of the year Monday after election results in Europe appeared to jeopardize the region's plan for recovery.

Benchmark U.S. crude fell as low as $95.34 per barrel, 10 cents below the previous low set Feb. 2. By the end of the day, the price had dropped 55 cents to finish at $97.94 per barrel in New York.

In the U.S., retail gasoline fell 2.5 cents over the weekend to a national average of $3.777 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has dropped by nearly 16 cents since peaking in early April at $3.936. Gasoline is 20 cents cheaper than a year ago.

In the Buffalo Niagara region, a gallon of regular averaged $4.03 Monday. Although that is down 6 cents from a week ago, it remains 26 cents above the national average.

The price of oil declined after voters in France and Greece rejected incumbent leaders who supported austerity measures to fix the region's struggling economy. French voters elected a new president, socialist Francois Hollande, who promised to boost spending. Greek voters ousted pro-austerity candidates and left their parliament without a controlling party.

The results could derail the eurozone's plans to use spending cuts to fight its debt crisis, analysts warned. That could further disrupt an economy that consumes 18 percent of the world's oil.

"This is not just a European problem," said independent analyst and trader Stephen Schork. An economic slowdown in Europe could drag down other major economies, including the U.S. and China, which rely on European consumers to buy their manufactured goods.

"There's just much more uncertainty in Europe right now," Schork said. "And that's scaring off some capital" from commodities markets.

Brent crude, which helps set the price of oil imported into the U.S., fell 2 cents to finish at $113.16 per barrel in London.

In other futures trading, natural gas rose 5.7 cents, or 2.5 percent, to end at $2.336 per 1,000 cubic feet. The futures price has jumped by nearly 20 percent since hitting a 10-year low April 19.