NEW YORK: Oil prices plunged more than 6 per cent to the lowest level in more than a year on Monday, pulling back sharply late in the session as fears of an economic slowdown rattled the market. US crude futures and global benchmark Brent hit their lowest levels since 2017 during the session, putting both benchmarks on track for losses of about 40 per cent in the fourth quarter. “What’s happening in the stock market is raising fears that the economy is grinding to a halt and thereby will basically kill any future oil demand,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “They’re pricing in a slowdown in the economy if not a recession with this drop.”
The fourth-quarter price decline is likely to cause producers to throttle back on their output, he said. US crude futures have hit the lowest level since June 22, 2017, as jitters have grown about the impact of the escalating US-China trade dispute on global growth and crude demand. Brent crude is at its lowest level since August 17, 2017. Markets across asset classes have come under pressure as the US government shutdown that began just after midnight on Saturday intensified growth concerns. Investors have flocked to safe-haven assets such as gold and government debt at the expense of crude oil and stocks.
US crude futures settled at $42.53 a barrel, down $3.06, or 6.7 per cent. Brent crude futures settled down $3.35, or 6.2 per cent, at $50.47 a barrel. The market settled early ahead of the Christmas holiday. Brent fell 11 per cent last week and hit its lowest level since September 2017, while US futures slid to their lowest level since July 2017, bringing the decline in the two contracts to more than 35 per cent for the quarter. — Reuters
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