INTERNATIONAL. Crude oil tumbled more than US$6 a barrel in New York, the biggest daily drop in more than 17 years, as the market worried that the weak US economy would hurt the global demand for crude.
Crude futures for August delivery fell as much as US$9.26 to $135.92 today. Oil futures reached a record US$147.27 a barrel on 11 July.
Oil dropped as Federal Reserve Chairman Ben Bernanke said risks to growth and inflation have risen, in testimony to the Senate Banking Committee. He abandoned a June assessment that the threat of an economic slowdown had diminished.
Crude oil for August delivery fell US$6.49, or 4.5%, to US$138.69 a barrel at the close of floor trading on the New York Mercantile Exchange. It was the biggest percentage drop since March.
The Organisation of Petroleum Exporting Countries, supplier of about 40% of the world’s oil, said it expects demand for its members’ crude will fall in 2009 as the global economy slows. Demand for OPEC crude next year will average 31.2 million barrels a day, a drop of 710,000 barrels a day from the forecast for 2008, the group said in its monthly oil market report today.
The US Dollar fell to an all-time low of US$1.6038 per Euro in London from US$1.5908 yesterday. The rising appeal of commodities caused by the declining value of the dollar has outweighed concern that an economic slowdown in developed countries will cut demand for oil.
Brent crude oil for August settlement fell US$5.27, or 3.7%, to US$138.65 a barrel on London’s ICE Futures Europe exchange, after touching US$134.96 a barrel.