Oil extends losses as economy pessimism persists
BANGKOK (AP) — The price of oil fell below $91 a barrel Wednesday in Asia, tracking stock markets which dropped on renewed pessimism about the outlook for economic growth. Benchmark crude was down 62 cents to $90.75 a barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped 56 cents to settle at $91.37 a barrel Tuesday in New York. Oil failed to get an enduring boost from an improvement in U.S. consumer confidence to its highest level since February.
Markets were overshadowed by comments from Charles Plosser, president of the U.S. Federal Reserve’s Philadelphia branch, indicating that the Fed’s efforts to support the world’s biggest economy would likely fall short of its goals. The comments reinforced the current pessimism about growth prospects, and dragged down stocks on Wall Street and then Asia. Benchmark crude has fallen from near $100 since the middle of last month. Energy prices tend to fall when growth is slow because of lower demand.
The U.S. economy is growing slowly. There also are concerns that Europe’s debt crisis will continue to weigh on the global economy. China’s export-driven economy has cooled off, largely due to Europe’s problems. Brent crude was down 65 cents at $109.80 a barrel on the ICE futures exchange in London.
In other energy futures trading on the New York Mercantile Exchange:
- Heating oil was down 1.2 cents at $3.095 a gallon.
- Wholesale gasoline gained 0.7 cent to $2.83.
- Natural gas gained 2.6 cents to $2.95 per 1,000 cubic feet.