NEW YORK: More concerns about the strength of the global economy sent the price of oil down for the fourth straight day.
Crude has fallen by nearly 10 percent this month on concerns about the sluggish global economy, while supplies of oil remain ample.
Brent crude fell below $ 100 a barrel for the first time in nine months as continued concerns about the global economy weighed on the outlook for demand, while gold and US stocks rebounded after the recent
sell-off lured buyers into the market.
The broad rout in commodities and stocks seen in recent sessions was triggered by data from China and the US
that raised worries about the strength of the global economy’s recovery.
Those fears continued to weigh on oil yesterday, with Brent crude down $1.15 at $99.48 a barrel. US crude lost 36 cents to $88.35.
“We are still seeing some weakness in price, in contrast to a number of markets that are snapping back to the upside with more vigor. That’s because we still have a lot of oil,” said Tim Evans, an Energy Futures Specialist at Citi Futures Perspectives in New York.
“I think what we’re seeing is a shift in the oil markets’ focus to its own fundamentals, rather than trying to pretend
that the oil market is the equity market, or a currency market.”
US stocks gained, supported by strong earnings results from some of America’s biggest companies and on expectations that the US Federal Reserve will continue to provide stimulus.
Stocks on Wall Street rose more than 1 percent by early afternoon, helped in part by a drop in US consumer prices last month that left room for the US Federal Reserve to keep up its economic stimulus efforts.
“Dovish economic data is not good in the long run, but it is certainly supportive of more Fed action,” said Art Hogan, managing director at Lazard Capital Markets in New York.
A batch of strong earnings reports also drove gains.
Coca-Cola reported better-than-expected profit that sent its shares up more than 5 percent to their highest level since 1998. Shares of Johnson & Johnson hit a record high of $ 83.50 after the health care company, a Dow component, reported strong quarterly earnings.
The Dow Jones industrial average gained 147.43 points, or 1.01 percent, to 14,746.63. The Standard & Poor’s 500
Index rose 19.87 points, or 1.28 percent, to 1,572.23.
The Nasdaq Composite Index climbed 44.41 points, or 1.38 percent, to 3,260.90.
MSCI’s global share index, which tracks around 9,000 stocks in 45 countries, was up 0.6 percent, having been almost 0.5 percent lower earlier in the day. The FTSEurofirst 300 closed 0.7 percent lower.
Reproduced with permission from Arab News