BREAKING NEWS

Oil at lowest in year following global stock market tumble

Oil at lowest in year following global stock market tumble
FILE PHOTO: A pump jack operates in the Permian Basin oil production area near Wink, Texas U.S. August 22, 2018. REUTERS/Nick Oxford/File Photo -
Copyright
Nick Oxford(Reuters)
Euronews logo
Text size Aa Aa

By Jessica Resnick-Ault

NEWYORK (Reuters) – Oil fell more than 2 percent on Monday to the lowest in over a year as global stock markets tumbled under pressure from concerns about a U.S. government shutdown and worsening world economy.

Crude futures have fallen by more than 30 percent so far this quarter to the lowest since the third quarter of 2017, as investors have grown increasingly wary of the impact to global growth, and crude demand, from an escalating trade dispute between the United States and China.

Markets across asset classes have come under pressure amid growth concerns intensified by a U.S. government shutdown.

Technology stocks led a broad sell-off on Wall Street on Monday, as the U.S. government shutdown threatened to spill into next year and the White House moved into fire-fighting mode amid what is already the S&P 500’s worst December since the Great Depression.

All the 11 major S&P 500 <.SPX> sectors were lower, and all the 30 components of the Dow Industrials <.DJI> were in the red, pushing them closer to bear territory.

The U.S. Senate has been unable to break an impasse over U.S. President Donald Trump’s demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3.

Investors have flocked to perceived safe-haven assets such as gold and government debt, at the expense of crude oil and stocks.

Brent crude futures <LCOc1> were down $1.37 a barrel to $52.45 by 11:50 a.m. ET (1650 GMT), having touched a session low of $52.33, the lowest since Sept. 2017, while U.S. crude futures <CLc1> fell $1.29 to trade at $44.30, after dropping to a session low of $44.10.

Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017, bringing the decline in the two contracts to 35 percent so far this quarter.

The macroeconomic picture and its impact on oil demand continue to pressure prices. Global equities <.MIWD00000PUS> have fallen nearly 9.5 percent so far in December, their biggest one-month slide since September 2011, when the euro zone debt crisis was unfolding.

The trade dispute between the United States and China and the prospect of a rapid rise in U.S. interest rates have brought global stocks down from this year’s record highs and ignited concern that oil demand will be insufficient to soak up any excess supply.

The Organization of the Petroleum Exporting Countries and allies led by Russia agreed this month to cut oil production by 1.2 million barrels per day from January.

Should that fail to balance the market, OPEC and its allies will hold an extraordinary meeting, United Arab Emirates Energy Minister Suhail al-Mazrouei said on Sunday.

“Oil ministers are already taking to the airwaves with a ‘price stability at all cost’ mantra,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

(Additional reporting by Jane Chung and Amaanda Cooper; Editing by Adrian Croft and Tom Brown)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.
Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.