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Source: http://www.channelnewsasia.com/stories/afp.../360684/1/.html SINGAPORE: Oil prices continued lower in Asia on Wednesday after fears for economic growth sent them tumbling to their steepest fall in 17 years during New York trading, analysts said. New York's main oil contract, light sweet crude for August delivery, was 64 cents lower at US$138.10 a barrel. The contract sank US$6.44 to close at US$138.74 on Tuesday at the New York Mercantile Exchange. It was the sharpest single-session decline since January 1991. "I was stunned," said Dave Ernsberger, Asia director of global energy information provider Platts. "At one point crude futures fell by US$10 in one hour." Brent North Sea crude for August delivery was 36 cents lower at US$138.39 a barrel following a plunge of US$5.17 to settle at US$138.75 Tuesday in London. Analysts said the heavy falls coincided with US Federal Reserve chairman Ben Bernanke's semi-annual forecast to Congress, in which he said there was a "high degree of uncertainty" about the US economic outlook. "The move down started when Ben Bernanke started speaking on television," Ernsberger said. "It fell while he was talking." Bernanke said the Federal Reserve had lifted its outlook for the US economy this year, in a forecast that appears to show no recession. The central bank projected 2008 growth in a range of 1.0 to 1.6 per cent, up from an April projection of 0.3 to 1.2 per cent. But he warned of numerous risks, including a potentially troublesome rise in inflation and stressed financial markets. "The economy continues to face numerous difficulties, including ongoing strains in financial markets, declining house prices, a softening labour market, and rising prices of oil, food, and some other commodities," Bernanke said. Traders fear that a slowing economy in the United States, the world's biggest oil consumer, will hurt demand for crude. "It's having a justifiably large impact," Ernsberger said. Al Goldman at Wachovia Securities blamed the huge price fall on Bernanke's "gloomy assessment" as well as a cut in the demand forecast by OPEC. The Organisation of the Petroleum Exporting Countries (OPEC) on Tuesday revised down its forecast for growth of world oil demand this year to 1.20 per cent from 1.28 per cent, citing an economic slowdown and high fuel prices. "The new price structure and slower world economy have helped dampen oil demand growth in many regions," OPEC said in its monthly report. After the heavy falls on Tuesday, the oil market was looking ahead to a weekly government report on US energy stockpiles which was to be released later Wednesday. A Platts survey of analysts suggests a fall in US crude stocks of three million barrels and a drop of 1.1 million barrels for gasoline. Oil prices had soared after breaking through US$100 at the start of 2008, and hit peaks above US$147 last Friday. The record prices sparked protests around the world, and fears for economic growth. - AFP/yb