Oil prices sank beneath $60 a barrel in London on Monday, hitting a 17-month low point on worries that a global recession would sap energy demand, and as the United States currency strengthened against the euro.
In early trading, Brent North Sea crude for December delivery dropped to $59,02 per barrel, the lowest point since February 2007. The contract later stood at 62,28, down $1.87 from Friday’s close.
New York’s main contract, light sweet crude for December delivery, tumbled to $61,30 a barrel, which was last seen in May 2007. Later on Monday it traded at $60,25, down $1,80.
The market extended last week’s heavy losses to plunge underneath the psychological barrier of $60 per barrel in London for the first time since March 2007.
“Crude prices have continued to slide, as global recessionary concerns intensified after dramatic falls in Asian financial markets which saw Tokyo’s Nikkei index fall to its lowest levels since 1982,” said Sucden analyst Nimit Khamar.
“Oil prices fell below $60 a barrel to a 17-month low as market participants fear oil demand will suffer amid a global recession.
“Prices are more or less tracking the movements of global equity markets at the moment, as market participants view the indices as gauge for economic conditions and hence an indicator for future oil demand.”
Recession fears sent world stocks tumbling on Monday, with Tokyo at a 26-year low, Hong Kong down 12% and Europe nursing heavy losses despite a G7 pledge to stabilise the financial system. — AFP