Oil prices drop underneath 76 dollars

12th August 2010, Comments 0 comments

World oil prices dropped below 76 dollars on Thursday, falling for the third straight day as falling equities and more downbeat US data stoked worries about the global economy, analysts said.

Brent North Sea crude for delivery in September sank as low as 75.62 dollars per barrel. It later stood at 76.38 dollars, down 1.26 dollars from Wednesday.

New York's main contract, light sweet crude for delivery in September, dived as low as 76.05 dollars. It later traded at 76.84 dollar, down 1.18 dollars.

Wall Street fell further on Thursday after stock market losses in Asia and Europe as data showing an unexpected rise in weekly jobless claims fanned recovery fears for the world's biggest economy.

The Dow Jones Industrial Average dropped 1.03 percent in opening trades, after slumping 2.5 percent on Wednesday.

Data showed US jobless benefits jumped unexpectedly last week to the highest level in about six months, fueling concerns unemployment could dampen recovery.

Initial claims climbed 2,000 to 484,000 in the week to August 7 from the previous week's upwardly revised figure of 482,000. Most economists had expected 465,000 new claims.

The oil market fell in response because the United States is the world's biggest energy-consuming nation.

"On the open, the Dow fell over one percent as weaker jobless claims spooked the market and showed another sign of the stubborn unemployment situation remaining just that," said CMC Markets analyst James Hughes.

Stock markets mainly slid on Thursday as many investors ditched risky assets on mounting fears over the global economic recovery.

A fierce equities sell-off began Wednesday after the US Federal Reserve and the Bank of England cut their outlooks, while investors also shunned risk on signs of slowing industrial growth and rising inflation in China.

A sharp widening of the US trade deficit added to the gloom, triggering fears of a double-dip recession in the world's biggest energy-consuming nation.

"Crude oil prices retreated for a third consecutive day ... amid continuing concerns over the fragile global economic recovery that could slow down the demand for oil," said Sucden analyst Myrto Sokou.

She added: "The energy market is back to the previous trading range of 70-80 dollars per barrel, as global uncertain conditions and fairly disappointing economic figures from the United States, eurozone and China weigh heavily on the market."


© 2010 AFP

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