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2008-10-28 09:35:41 UTC
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Oil price dives briefly below 60 dollars
AFP - Tuesday, October 28NEW YORK (AFP) - - Oil prices sank to 17-
month lows Monday amid rising worries that a global recession will sap
energy demand.
ADVERTISEMENT
New York's main contract, light sweet crude for December delivery,
fell 93 cents to close at 63.22 dollars a barrel. At one point, the
contract fell as low at 61.30 dollars, a level last seen in May 2007.
In London, Brent North Sea crude for December delivery plummeted as
low as 59.02 dollars per barrel, its lowest point since February 2007,
before settling at 61.41 dollars, a decline of 64 cents.
The oil selloff was sparked by dramatic falls in Asian financial
markets including Tokyo's Nikkei index falling to its lowest level
since 1982.
John Kilduff at MF Global said even China's growth is slowing,
limiting energy demand, and that traders are bracing for weaker
activity worldwide.
"Doom and gloom carried over to Asia last night," he said.
Sucden analyst Nimit Khamar said, "Prices are more or less tracking
the movements of global equity markets at the moment as participants
view the indices as a gauge for economic conditions and hence an
indicator for future oil demand."
The market extended last week's heavy losses to plunge underneath the
psychological 60-dollar barrier in London for the first time since
March 2007.
The fresh equities turmoil came despite a pledge by the Group of Seven
major economies to cooperate to bring stability to the global
financial markets.
Crude prices have slumped since striking record high points above 147
dollars in July.
The Organization of the Petroleum Exporting Countries (OPEC), in a bid
to shore up falling prices, announced Friday that it would cut output
by 1.5 million barrels per day to 27.3 million bpd starting in
November.
However, the market has continued to fall, with OPEC's decision to cut
supply at a time of global financial turmoil seen as hurting already
weak energy demand, dealers said.
The market has also been weighed down by the strengthening dollar,
which makes dollar-priced crude more expensive for buyers holding
weaker currencies and therefore tends to dampen demand.
The euro sank under 1.24 dollars in early London trading on Monday,
hitting the lowest point for more than two years on fears of recession
and the withdrawal of funds into the dollar, dealers said.
The European single currency touched 1.2334 dollars, the lowest point
since April 26, 2006.
Analysts warned that oil prices could fall further if the dollar
continues to strengthen.
"Further downward pressure may come from a strong dollar and further
falls in equity markets," said analysts at energy consultancy John
Hall Associates.
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Adapted from Yahoo News.........
Oil price dives briefly below 60 dollars
AFP - Tuesday, October 28NEW YORK (AFP) - - Oil prices sank to 17-
month lows Monday amid rising worries that a global recession will sap
energy demand.
ADVERTISEMENT
New York's main contract, light sweet crude for December delivery,
fell 93 cents to close at 63.22 dollars a barrel. At one point, the
contract fell as low at 61.30 dollars, a level last seen in May 2007.
In London, Brent North Sea crude for December delivery plummeted as
low as 59.02 dollars per barrel, its lowest point since February 2007,
before settling at 61.41 dollars, a decline of 64 cents.
The oil selloff was sparked by dramatic falls in Asian financial
markets including Tokyo's Nikkei index falling to its lowest level
since 1982.
John Kilduff at MF Global said even China's growth is slowing,
limiting energy demand, and that traders are bracing for weaker
activity worldwide.
"Doom and gloom carried over to Asia last night," he said.
Sucden analyst Nimit Khamar said, "Prices are more or less tracking
the movements of global equity markets at the moment as participants
view the indices as a gauge for economic conditions and hence an
indicator for future oil demand."
The market extended last week's heavy losses to plunge underneath the
psychological 60-dollar barrier in London for the first time since
March 2007.
The fresh equities turmoil came despite a pledge by the Group of Seven
major economies to cooperate to bring stability to the global
financial markets.
Crude prices have slumped since striking record high points above 147
dollars in July.
The Organization of the Petroleum Exporting Countries (OPEC), in a bid
to shore up falling prices, announced Friday that it would cut output
by 1.5 million barrels per day to 27.3 million bpd starting in
November.
However, the market has continued to fall, with OPEC's decision to cut
supply at a time of global financial turmoil seen as hurting already
weak energy demand, dealers said.
The market has also been weighed down by the strengthening dollar,
which makes dollar-priced crude more expensive for buyers holding
weaker currencies and therefore tends to dampen demand.
The euro sank under 1.24 dollars in early London trading on Monday,
hitting the lowest point for more than two years on fears of recession
and the withdrawal of funds into the dollar, dealers said.
The European single currency touched 1.2334 dollars, the lowest point
since April 26, 2006.
Analysts warned that oil prices could fall further if the dollar
continues to strengthen.
"Further downward pressure may come from a strong dollar and further
falls in equity markets," said analysts at energy consultancy John
Hall Associates.
Email StoryIM StoryPrintable ViewBlog This
Adapted from Yahoo News.........