Oil falls to near $84 on global slowdown fears
Oil prices slipped to near $84 a barrel Tuesday as fears of a recession in developed countries sent stock markets and commodities lower.
By early afternoon in Europe, benchmark oil for October delivery was down $2.32 to $84.13 in electronic trading on the New York Mercantile Exchange. Crude last settled at $86.45 on Friday because US markets were closed Monday for the Labor Day holiday.
Growing concern that a debt crisis among countries using the euro currency will undermine economic growth there and around the world helped push most Asian and European stock markets lower during the last few sessions.
On Tuesday, however, some exchanges in Europe recovered as bargain hunters bought into the market. London’s FTSE 100 was up 0.9 percent, while the Swiss SSMI gained nearly 4 percent after the country’s central bank took steps to weaken the Swiss franc and help boost exports.
A stagnant US jobs market is also hurting confidence. The Labor Department said Friday that US employers stopped adding jobs in August and the unemployment rate remained at 9.1 percent.
“Bottom line, it’s not unreasonable to suggest the US is in a jobs depression,” energy consultant The Schork Group said in a report.
President Barack Obama is scheduled to announce new policy measures to spark job creation in a speech Thursday.
In London, Brent crude for October delivery was up 94 cents at $111.02 on the ICE Futures exchange.
“The price of Brent is currently being supported mainly by speculation of further quantitative easing of US monetary policy,” said analysts at Commerzbank in Frankfurt. “In addition, the hurricane season in the US is providing psychological support. That said, we do not believe these factors could prevent a sharper price fall if recession fears continue to grow.”
In other Nymex trading for October contracts, heating oil fell 2.73 cents to $2.9701 per gallon and gasoline futures dropped 4.18 cents to $2.7978 per gallon. Natural gas for October delivery gained 2.5 cents to $3.897 per 1,000 cubic feet.—With Alex Kennedy in Singapore
