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Monday, 01 December, 2008, 22:10 GMT | more >>

Crude slides to under $100 a barrel



By Upstream staff 

Oil slipped below $100 a barrel today after a hefty sell-off in the previous session on growing concerns an economic slowdown in top consumer the US would undermine global energy demand.

US crude fell $2.80 to $99.74 a barrel by 0939 GMT, the first time since 5 March that it has fallen below $100. It plummeted almost $5 on expiry yesterday and is about $12 off the record $111.80 hit on Monday.

London Brent crude fell $1.71 to $99.01.

Oil and other commodities have broken through a series of record highs since the beginning of the year, as investors fled stocks markets and looked at dollar-denominated assets for refuge.

US oil prices averaged $97 a barrel since the beginning of this year, up from $72.30 in 2007.

But investors nervous about the economy are cashing in on recent record prices in commodity and energy.

"I suspect that it was a reassessment and a rationalisation of ongoing concerns over the U.S. economy that's triggered some selling," Reuters quoted David Moore, an analyst at Commonwealth Bank of Australia in Sydney, as saying in a note.

"Worryingly, with a falling US dollar on the backburner, market participants would swing their focus away from oil as a hedge against the dollar to more subdued supply and demand fundamentals," Mark Pervan, senior commodity strategist with ANZ bank, told the news agency.

Softening demand for oil products in the world's largest oil consumers eclipsed bullish weekly stocks data yesterday, and helped push prices lower.

US demand for gasoline over the past four weeks was 0.1% below last year, while demand for distillate fuels such as diesel, jet fuel and heating oil fell by about 5.4%, data from the US Energy Information Administration (EIA) showed.

The demand figures eclipsed bullish weekly US stocks data, that showed crude inventories up by a modest 200,000 barrels, while US distillates stocks dipped to their lowest level since June 2005 and gasoline stocks eased below their 15-year high, the EIA said.


Thursday, 20 March, 2008, 01:09 GMT  | last updated: Thursday, 20 March, 2008, 10:30 GMT

Watching the numbers: Asia traders extended oils fall today
 

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