Oil hits eight-month low in New York


OIL TUMBLED below $80 a barrel for the first time in eight months in New York as US inventories surged amid concern that the European debt crisis will drag down the global economy, reducing fuel demand.

Futures dropped as much as 1.9 per cent in New York to $79.92 a barrel, the lowest intraday level since October 6th.

Prices have slumped 27 per cent from this year’s settlement high as US stockpiles rose to the most in almost 22 years and growth slowed in the US, Europe and China.

“There’s negative momentum in the market, which is being accelerated by the inventory data, bad economic sentiment and a stronger dollar,” said Eugen Weinberg, head of commodities research at Commerzbank, who correctly forecast prices would fall after this week’s Fed meeting.

“I see markets bottoming in late summer, until then further slippage is likely.”

Prices peaked at a settlement high of $109.77 on February 24th.

Brent oil for August settlement decreased 87 cents, or 0.9 per cent, to $91.82 a barrel on the London-based ICE Futures Europe exchange. – (Bloomberg)