Related News
Oil down over 6 pct after US credit downgrade
Source: Agencies |
August 9, 2011, Tuesday
|
Online Edition
Online Edition
OIL plunged to its lowest price of the year yesterday on concerns about the slowing global economy and future demand for oil and gas.
Benchmark West Texas Intermediate crude fell US$5.57, or 6.4 percent to settle at US$81.31 per barrel on the New York Mercantile Exchange. That is the lowest settlement price of the year for crude, but it's still higher than the US$71.63 per barrel low of the past 12 months. Oil hit that on Aug. 24 of last year, when a combination of disappointing economic news and abundant supplies drove down prices.
Brent crude, used to price many international varieties of crude, yesterday fell US$5.63, or 5.2 percent, to settle at US$103.74 per barrel on the ICE Futures exchange in London.
Anxious traders pulled money out of oil and stocks and bought assets considered to be safer during times of economic uncertainty, such as Treasurys and gold. Gold topped US$1,700 an ounce for the first time, while stocks were down more than 5 percent.
Standard & Poor's on Friday cut the Triple-A credit rating for long-term US government debt. Yesterday's trading session was the first chance traders and investors had to react, and many of them sold off.
In the past two weeks, oil prices have dropped nearly US$16 per barrel. Analysts think oil remain volatile this week as traders look for some clarity about the direction of the world economy and demand for oil. The Department of Energy is scheduled to release its Short-term Energy Outlook today, and OPEC is expected to issue an updated forecast for global oil consumption as well.
Traders also are concerned about debt problems in Europe, where the European Central Bank said it will intervene to prop up the sagging economies of Spain and Italy.
Some analysts believe that global oil demand, particularly in emerging markets like China, will continue to support prices. The share of global oil demand in emerging markets has risen from 44 percent in 2008 to 48 percent this year, Barclays Capital said in a report for clients. China's share of global oil demand has increased more than 2 percent in the same period.
Goldman Sachs analysts also believe oil prices will rise next year. They told clients in a note published Friday that the risk of a US recession has risen, but their revised US economic outlook remains consistent with a recovery at a slower pace, "which is typical following a housing bust."
In addition Goldman said the outlook for economic growth in China and other emerging markets is positive.
US gasoline futures have fallen between 35 cents and 40 cents in the last two weeks. That will translate into a savings at the pump of about US$140 million to US$160 million a day for US motorists, according to Cameron Hanover energy consultancy.
In other Nymex trading for September contracts, heating oil fell 14 cents to settle at US$2.8017 per gallon, gasoline futures dropped 11.36 cents to settle at US$2.6916 per gallon and natural gas rose 0.6 cent to settle at US$3.935 per 1,000 cubic feet.
Benchmark West Texas Intermediate crude fell US$5.57, or 6.4 percent to settle at US$81.31 per barrel on the New York Mercantile Exchange. That is the lowest settlement price of the year for crude, but it's still higher than the US$71.63 per barrel low of the past 12 months. Oil hit that on Aug. 24 of last year, when a combination of disappointing economic news and abundant supplies drove down prices.
Brent crude, used to price many international varieties of crude, yesterday fell US$5.63, or 5.2 percent, to settle at US$103.74 per barrel on the ICE Futures exchange in London.
Anxious traders pulled money out of oil and stocks and bought assets considered to be safer during times of economic uncertainty, such as Treasurys and gold. Gold topped US$1,700 an ounce for the first time, while stocks were down more than 5 percent.
Standard & Poor's on Friday cut the Triple-A credit rating for long-term US government debt. Yesterday's trading session was the first chance traders and investors had to react, and many of them sold off.
In the past two weeks, oil prices have dropped nearly US$16 per barrel. Analysts think oil remain volatile this week as traders look for some clarity about the direction of the world economy and demand for oil. The Department of Energy is scheduled to release its Short-term Energy Outlook today, and OPEC is expected to issue an updated forecast for global oil consumption as well.
Traders also are concerned about debt problems in Europe, where the European Central Bank said it will intervene to prop up the sagging economies of Spain and Italy.
Some analysts believe that global oil demand, particularly in emerging markets like China, will continue to support prices. The share of global oil demand in emerging markets has risen from 44 percent in 2008 to 48 percent this year, Barclays Capital said in a report for clients. China's share of global oil demand has increased more than 2 percent in the same period.
Goldman Sachs analysts also believe oil prices will rise next year. They told clients in a note published Friday that the risk of a US recession has risen, but their revised US economic outlook remains consistent with a recovery at a slower pace, "which is typical following a housing bust."
In addition Goldman said the outlook for economic growth in China and other emerging markets is positive.
US gasoline futures have fallen between 35 cents and 40 cents in the last two weeks. That will translate into a savings at the pump of about US$140 million to US$160 million a day for US motorists, according to Cameron Hanover energy consultancy.
In other Nymex trading for September contracts, heating oil fell 14 cents to settle at US$2.8017 per gallon, gasoline futures dropped 11.36 cents to settle at US$2.6916 per gallon and natural gas rose 0.6 cent to settle at US$3.935 per 1,000 cubic feet.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
