Oil prices dropped below $91 per barrel this week, mirroring the falling stock markets as economic outlook takes a turn for the worst.
According to BusinessWeek, “Benchmark crude was down 59 cents to $90.78 a barrel by midmorning London time in electronic trading on the New York Mercantile Exchange. The contract dropped 56 cents to settle at $91.37 a barrel Tuesday in New York.
“Oil failed to get a lasting boost from an improvement in U.S. consumer confidence to its highest level since February. Markets were overshadowed by comments from Charles Plosser, president of the U.S. Federal Reserve’s Philadelphia branch, indicating that the Fed’s efforts to support the world’s biggest economy would likely fall short of its goals.”
The Plosser’s comments boost lingering pessimism regarding growth prospects and falling stocks on Wall Street and Asia. Spain, and the rest of Europe, have also seen disappointing results recently.
According to the Commodity Research Team at Commerzbank, “the renewed escalation of the debt crisis in the Eurozone, with violent protestors in Spain against the planned new austerity measures, has sparked gloomier sentiment on the financial markets once again and is also putting oil prices under pressure.”
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