Share this story
Close X
Switch to Desktop Site

Oil stocks down, but oil prices plunge anyway

Oil stocks in the US saw a big drop. But traders, focused on the stalling economy and rising dollar, ignored the oil stocks report and sent oil prices to their lowest level since February.

Traders work in the crude oil and natural gas options pit on the floor of the New York Mercantile Exchange in New York in this April 25, 2011 file photo. Although oil stocks fell sharply, oil prices plunged June 15, 2011, because of concerns about ongoing economic weakness and a rising dollar.

Shannon Stapleton/Reuters/File

About these ads

NEW YORK – Oil slid more than 5 percent Wednesday, as signs of further economic weakness fed demand worries and a rising dollar also weighed, triggering technical sell-stops and sending U.S. crude to its lowest level since February.

U.S. crude weakened early on data showing a rise in core inflation and shrinking New York manufacturing. It succumbed to intensifying selling pressure as it broke below the 150-day moving average and $95 key support. That eradicated brief gains after a big drop in weekly U.S. crude stocks, reported mid-morning.

``It's a rush for the exits. The market has been overvalued for some time now...the Brent market has been a bubble and the bubble is bursting today,'' said Tim Evans, energy analyst at Citi Futures Perspective.

``In my opinion, WTI would be fairly valued at $85 a barrel and Brent at $90 a barrel,'' Evans added.

The slump came as the U.S. dollar extended gains for its biggest daily rise since September, with the dollar index up 1.8 percent, while the S&P 500 stock index tumbled by more than 1.6 percent to its lowest level since March.

The euro slid against the dollar and was on track for its biggest daily percentage drop in 10 months, as investors fretted about the Greek debt crisis.\


Page:   1   |   2

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.