Oil falls below $80 per barrel on demand concerns (AP)

Oil fell for a third straight day on Friday on worries that the global economy is headed for recession and could cut demand for crude.

Economies around the world are at risk of stalling, and that has punished prices of stocks and commodities. U.S. political leaders are in a standoff that could force the government to shut down, a manufacturing survey suggested a slowdown in China, and Europe hasn't solved its banking crisis.

Moody's downgraded eight Greek banks, because of the country's deteriorating economy. The concern is that a Greek default could hurt other nations in Europe and beyond.

When the economy slows, do does demand for oil.

"People are just afraid that demand is going to be affected in a negative way and that's pulling prices back down," said Tom Bentz, an analyst at BNP Paribas Commodity Futures.

After a broad decline the day before, stock markets on Friday wavered between small gains and losses, while many commodities — including gold — continued to drop.

A day after it plunged more than 6 percent, Benchmark U.S. oil fell 66 cents to finish at $79.85 per barrel. The price of oil still is almost $5 a barrel more than a year ago. Analysts expect it to stay between $75 and $90 per barrel until there is a better picture of what's ahead for the global economy.

U.S. benchmark oil hit $113.93 a barrel on April 29. But high unemployment in the U.S. — the world's biggest oil consumer — and signs of a slowing economy in China — the second largest oil consumer — pulled crude down.

At the pump, gas prices fell almost 2 cents Friday to a national average of $3.54 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That's about half-way between the high of $3.98 on May 5 and the low of $3.03 on Jan. 3.

Brent crude, which is used to price many kinds of oil produced overseas, fell $1.52 to end at $103.97 per barrel.

In other energy trading, heating oil fell 5.2 cents to finish at $2.8059 per gallon, gasoline futures dropped 1.93 cents to finish at $2.5244 per gallon and natural gas fell less than a cent to end the day at $3.701 per 1,000 cubic feet.

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