Oil prices fall near $96, reversing morning gains

Benchmark crude fell 99 cents to finish at $96.27 per barrel in New York. The decline erased nearly all the gains from the day before, when minutes from the U.S. Federal Reserves July 31-Aug. 1 meeting suggested the Fed was preparing new steps to boost the economy.But on Thursday, oil traders were less sure that the central bank would act. And there was more uncertainty out of Europe.James Bullard, president of the Feds St. Louis bank, told CNBC Thursday that the minutes from the Feds meeting were stale because the economy had picked up since then. The oil market had hoped for another round of bond-buying, called quantitative easing, or QE.If youre going to downgrade the expectations of QE, that will definitely put some downward pressure on the market for oil, said Phil Flynn of Price Futures Group.The leaders of Germany and France also suggested Thursday that they would be hesitant to extend deadlines for Greece to make reforms tied to its bailout.Oil prices headed lower around midday, shortly after the European leaders made their comments.Overall, oil prices have climbed nearly $10 per barrel since Aug. 1, partly on hopes that the U.S., Europe and China would do more to increase growth in their respective economies. Growth increases demand for oil and other energy products.At the pump, the national average for gasoline rose less than a penny overnight to $3.718 per gallon, according to AAA, Wright Express and the Oil Price Information Service. Thats about a quarter more than a month ago and about 15 cents higher than a year ago.Natural gas prices also fell after the government said more natural gas went into storage last week than analysts had expected. The nations gas reserves remain well above average because of strong production and relatively soft demand.