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Oil Plummets on Economic Woes
Aug 19,2011 09:02CST
industry news
Crude prices plummeted on Thursday on economic woes in view of a series of weak U.S. data.

NEW YORK, Aug. 18 (Xinhua) -- Crude prices plummeted on Thursday on economic woes in view of a series of weak U.S. data.

Investors' concerns about a recession worsened as the U.S. released more signs of a weak economy. New data pointed to a disappointing labor market, showing initial jobless claims jumped 9,000 to the highest level in four weeks. Then, the National Association of Realtors said the sales of existing homes dipped steeply 3.5 percent in July, indicating a still struggling housing market.

Besides, the Philadelphia Federal Reserve Bank said factory activity in the U.S. Mid-Atlantic region plunged unexpectedly to minus 30.7 in August, its worst level since March 2009.

Wall Street saw a great drop in choppy trading as risk aversion increased. Driven by fears of a recession, investors fled from riskier assets like crude oil and rushed into safe heavens like gold and U.S. treasury.

The dollar was also widely demanded and rose about 0.7 percent against a basket of counterparts, posing pressure to crude prices.

In Europe, worries about debt and a new financial transaction tax pushed down banks' shares. Looming European economic perspectives hurt oil demand expectation.

But the situation in North Africa and Middle East caused concerns about sustained crude supplies. U.S. President Barack Obama has banned oil imports from Syria as part of new sanctions, which means about 10,000 barrels less crude supplies in the United States.

Light, sweet crude for September delivery plunged 5.20 dollars, or 5.94 percent, to settle at 82.38 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for October delivery dropped sharply 3.61 dollars, or 3.26 percent, to close at 106.99 dollars a barrel.



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