Oil Takes Out $90 to the Downside
October 6th, 2008Via: AP:
Oil prices fell to an eight-month low below $90 a barrel Monday on speculation that the spreading financial crisis will exacerbate a global economic slowdown and cut demand for crude oil.
Significant gains by the U.S. dollar against the euro also contributed to slumping oil prices.
By midday in Europe, light, sweet crude for November delivery was down $4.03 to $89.85 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, the price fell as low as $89.07 a barrel before recovering slightly.
On Friday, the November contract lost 9 cents to close at $93.88 a barrel.
In London, November Brent crude fell $3.64 to $86.61 a barrel on the ICE Futures exchange.
Oil prices have tumbled nearly 40 percent since peaking in July. The Nymex front-month contract last traded this low in early February.
The drop came as world stock markets plunged amid growing investor anxiety that the U.S. bad debt crisis is enveloping Europe. Germany announced Sunday a bailout package totaling euro50 billion ($69 billion) for Hypo Real Estate, the country’s second-biggest commercial property lender, part of a scramble by European governments to save failing banks.
“What happened over the weekend was further evidence of the spread of this financial crisis to Europe,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “This deepens the sentiment that we’re going to see a more widespread economic slowdown or even recession, and that’s no good for oil demand.”
