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Oil Tumbles over 6 pct on Recession Fears
Sep 23,2011 09:04CST
industry news
Source:SMM
U.S. crude oil price tumbled over 6 percent on Thursday as fears of global recession were mounting in view of weak data from U.S. and Europe.

NEW YORK, Sept. 22 (Xinhua) -- U.S. crude oil price tumbled over 6 percent on Thursday as fears of global recession were mounting in view of weak data from U.S. and Europe.

Light, sweet crude for November delivery dropped 5.41 dollars, or 6.30 percent to 80.51 dollars a barrel on the New York Mercantile Exchange, after dipping below 80 dollars a barrel. It is the lowest settlement since Aug. 9, when it closed at 79.30 dollars a barrel.

The crude market was seeing large-scale of money outflow as investors chose sell-off in reaction to the Federal Reserve's pessimistic views about U.S. economic outlook.

Although the U.S. central bank announced monetary boosting measures after the two-day policy meeting, its statement of "there are significant downside risks to the economic outlook, including strains in global financial markets " weighed heavily on the crude markets.

Investors remained cautious about the economic future of the world biggest oil consumer. Billionaire investor George Soros told an interview that he believed U.S. is already experiencing the pain of double-dip recession.

On Thursday, the Labor Department said the initial jobless claims dropped 9000, but remained at the high level of over 420, 000, indicating a struggling job market.

To add to gloom, the euro zone's private sector contracted in Sept. for the first time in two years, underscored by German business activity figures dropping to a 26-month low. And China's factory activity also contracted for a third month.

Besides, driven by wide-spread risk-aversion, the dollar rallied against its major counterparts. The dollar index rose about 1.5 percent, pressuring the dollar-denominated crude prices.

In London, Brent crude for November delivery plunged 4.87 dollars, or 4.41 percent to close at 105.49 dollars a barrel.

 

crude oil

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