Business | Oil & Gas
Oil falls near $94 on concerns of weakening demand
Oil fell more than $4 towards $94 a barrel on Thursday, as the US dollar rose and as the US Senate's approval of a $700 billion bailout of the financial sector failed to allay concerns over weakening fuel demand in the world's top energy consumer.
- Reuters
- Published: 00:13 October 3, 2008
London: Oil fell more than $4 towards $94 a barrel on Thursday, as the US dollar rose and as the US Senate's approval of a $700 billion bailout of the financial sector failed to allay concerns over weakening fuel demand in the world's top energy consumer.
US light crude for November delivery fell $4.39 to $94.14 by 1450 GMT, erasing earlier gains above $100. It had settled $2.11 lower at $98.53 on Wednesday, when US government data show-ed supplies rising and as the dollar firmed.
London Brent was down $4.33 at $91.00.
The Senate's approval of the rescue plan initially reassured European stock markets, but US stocks fell sharply after weak US economic data.
The dollar's advance to a near 13-month high against the euro and a basket of major currencies put pressure on oil.
But oil's fall also reflected a shift in sentiment to focus more on falling demand in industrialised countries.
"Expect crude to track firmer equity markets for a little while longer," said Edward Meir, of broker MF Global. "But we expect the two to eventually decouple.
"On its own, we think crude will not fare as well, and will be particularly vulnerable heading into the fourth quarter," he said. "We would not be surprised to see $75-$80 on WTI (US crude) by the end of the year."
Latest US government data on jobless claims and factory orders provided more evidence of an economic slowdown.
The number of US workers filing new claims for jobless benefits rose to their highest in seven years in the week to September 27.
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