US oil finishes below $40 for first time since 2009
Oil
prices sank Monday, with the US crude benchmark finishing below $40 a
barrel for the first time in six years on worries about China's
weakening economy after an equities sell-off. "The petroleum markets are
extending last week's decline along with global equity markets on
Monday as worries over…
AFP57 mins ago
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US oil finishes below $40 for first time since 2009
58 minutes ago
US benchmark West Texas
Intermediate for October delivery dropped $2.21 to $38.24 a barrel on
the New York Mercantile Exchange (AFP Photo/Spencer Platt)
New York (AFP) - Oil
prices sank Monday, with the US crude benchmark finishing below $40 a
barrel for the first time in six years on worries about China's
weakening economy after an equities sell-off.
Brent
North Sea crude for October, the international benchmark, plummeted
$2.80 to $42.69 a barrel in London, its lowest level since March 2009.
"The
petroleum markets are extending last week's decline along with global
equity markets on Monday as worries over slowing Chinese economic growth
intensified," said Tim Evans, energy markets strategist at Ciri
Futures.
Financial markets
endured one of their worst days since the 2008 financial crisis,
starting with a rout in Asian bourses on mounting fears that China's
slowing economy will drag down the global economy with it. European and
US stocks joined the sharp sell-off, and commodities were hammered.
The
catalyst was the Shanghai stock market's 8.5 percent plunge, its
sharpest one-day fall in eight years, despite Chinese government efforts
to stem market turmoil on markets since mid-June."These jitters over China -- if you think they're bad for the US equity market, they're even worse for the global oil market," said John Killduff of Again Capital.
Killduff said the
issue of an economic slowdown in China, the world's second-largest
economy and crude-oil consumer, "goes right to the heart of the matter"
as far as demand for oil and other commodities.
He
estimated that the WTI contract had further to fall. "I thought we'd be
getting into the mid-$30s. Now I think we'll be getting into the
mid-$20s," he said.
Bart
Melek, head of commodity strategy at TD Securities, said the oil market
was getting clobbered from two sides: The outlook for demand was
weakened by China's woes and there was no sign of easing in the global
oversupply.
"We continue to be
worried about new Iranian supplies, US drilling activity increasing,
maintenance season coming up for refineries... that basically prompts
people to think the oil market is going to be oversupplied for longer,"
said Melek.
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