Oil price drop; NY crude below $85

15th August 2011, Comments 0 comments

Oil prices fell on Monday amid a downbeat outlook for energy demand owing to the spectre of another global recession, analysts said.

New York's main contract, West Texas Intermediate crude for delivery in September, shed 87 cents to $84.51 a barrel.

Brent North Sea crude for September dropped 47 cents to $107.56 a barrel in midday London deals.

Crude last week rode the same rollercoaster as global stock markets, with traders concerned about a global slowdown hitting energy demand.

"Looking back at Friday where Brent made no gains despite the positive developments in equity markets indicates that there is a careful attitude in the oil market," said Bjarne Schieldrop, a commodities analyst at Swedish bank SEB.

Victor Shum, an analyst with Purvin and Gertz energy consultants, told AFP that he expects the oil market to stay volatile.

"I expect that the market will continue to be rocky and volatile because there's still concern about a potential return of the global economy to a recession," he said.

World Bank chief Robert Zoellick said in Australia on Sunday that investors had lost confidence in the economic leadership of several key countries and warned that global markets were consequently in a "new danger zone".

Zoellick said a convergence of events in the United States and Europe had rattled investors in countries already struggling to cap sovereign debt issues and unemployment.

"And what we've seen is that confidence is a fragile element of how the market economy works," he said.


© 2011 AFP

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