Alex Kennedy
Associated Press
October 9, 2008
SINGAPORE (AP) — Oil prices fell below $88 a barrel Thursday in Asia on investor fears that crude demand will weaken as turmoil in the financial system pushes economies in the U.S. and Europe into recession.
- A d v e r t i s e m e n t
Light, sweet crude for November delivery was down $1.39 to $87.56 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract overnight fell $1.11 to settle at $88.95.
The U.S. Federal Reserve, along with central banks in Europe and China cut interest rates Wednesday in a bid to jump-start lending. But markets in the U.S. and Europe sank on deepening fears about frozen lending markets and sluggish growth. The Dow Jones industrial average lost another 2 percent, and the index has shed more than a third of its value since its all-time high set one year ago Thursday.
“Traders are expecting the world to move toward recession, with the U.S. and Europe especially a concern,” said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. “Based on the short-term trend, you could see prices approaching $80 in next week.”
Weighing on prices was evidence of falling demand in the U.S, where crude inventories jumped by 8.1 million barrels last week while gasoline stocks surged 7.2 million barrels, the Energy Information Administration said Wednesday in its weekly inventory report.
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