Crude oil continued sliding and tumbled to US$91 on Tuesday as the unwrapping U.S. financial crisis added to the energy demand concern.
Light, sweet crude for October delivery lost US$4.56 to settle at US$91.15 a barrel on the New York Mercantile Exchange. Futures fell as low as US$90.5 a barrel, the lowest intraday price since Feb. 8. Crude oil now virtually remained unchanged this year.
The deteriorating conditions of the U.S. financials exacerbated concerns that the weak economy would force consumers and businesses to choose a more conservative energy consumption pattern, which would bring the oil prices down. American International Group Inc. was still struggling to seek capital Tuesday when several rating agencies downgraded the world's top insurer. On Monday, the fourth largest U.S. investment bank Lehman Brothers Holdings Inc. filed for bankruptcy protection and the third biggest Merrill Lynch was sold to Bank of America Corp. under the pressure of regulators.
The U.S. Federal Reserve's Tuesday decision to keep interest rate unchanged also helped to send the crude down. Usually lower interest rates would result in the depreciation of the dollar, a move likely to prompt more buying of crude as hedge against inflation.
In London, Brent crude for November delivery plunged US$5.34 to hit US$88.90 a barrel on the ICE Futures Exchange, setting the lowest trading price in more than seven months.
(Xinhua News Agency September 17, 2008)
