prices fell on Monday, briefly ducking below $90, on concerns that crude demand may be hit by fears of a slowdown in US economic and fresh uncertainty on the equity markets, dealers said.
New York’s main contract, light sweet crude for delivery in March, lost 50 cents to $90.21 per barrel, having earlier dropped below the $90 level.
Brent North Sea crude for March dropped 10 cents to $90.80.
Dealers looked on Monday to “what equity markets were doing because that’s going to tell us what demand will be like in the second and third quarters,” said MF Global senior energy broker Rob Laughlin.
Asian markets fell sharply Monday and European stock followed suit for most of the day before recovering some lost ground, with investors worried about possible recession and a forthcoming interest rate call in the United States.
The Paris market was doubly hit in the fallout from the alleged seven-billion-dollar fraud unearthed last week at French bank Societe Generale.
“Crude oil prices are reacting to the gyrations of global equities markets,” said Purvin and Gertz energy analyst Victor Shum earlier Monday.
“The downward correction that we are seeing now is due to the weak close of Wall Street last week and Asian markets trading down.”
Oil prices are off their early January historic highs of $100.09 for New York’s light sweet crude and $98.50 for Brent.
However, oil is still trading at elevated levels thanks to keen demand and limited supplies, traders said