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Oil hovers beneath $96 on US, Europe growth fears

The price of oil hovered below $96 a barrel Monday, weighed by data released late last week which showed that U.S. industrial production weakened and Europe remained mired in recession.

By early afternoon in Europe, benchmark crude for March delivery was down 17 cents to $95.69 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.45 on Friday.

Trading volume was lower than usual as floor trading, like U.S. financial markets, was closed for the Presidents Day holiday.

Investor sentiment has been subdued since the Federal Reserve said Friday that U.S. factory production slowed in January, mostly because of a big drop in output at auto factories. Most analysts think the slowdown is temporary, but it was enough to raise concern about the still-sluggish economic recovery.

Traders were also concerned about a deepening recession across the economy of the 17 countries that use the euro. Their combined economic output shrank by 0.6 percent in the final quarter of 2012 from the previous three-month period. The decline was bigger than the 0.4 percent drop expected and the steepest fall since 2009.

Markets were waiting for comments from European Central Bank President Mario Draghi, who is meeting Monday with members of the European Parliament to discuss the financial crisis in the eurozone.

Brent crude, used to price many international varieties of oil, was down 1 cent to $117.65 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the Nymex:

— Heating oil fell 0.34 cent to $3.2070 a gallon.

— Wholesale gasoline rose 0.47 cent to $3.3185 a gallon.

— Natural gas added 0.2 cent to $3.155 per 1,000 cubic feet.

Pamela Sampson in Bangkok contributed to this report.