US crude falls below $90 on adverse euro zone cues
27 September 2012
Crude oil prices fell yesterday as the euro zone debt crisis escalated and reinforced concerns about slowing economic growth, even as US gasoline futures vaulted over 3 per cent due to depressed inventories and supply uncertainty.
The continuing dispute between the West and Iran over the country's nuclear programme cut losses for Brent crude, which is more vulnerable to Middle East and African supply disruptions.
Europe's debt problems worsened with a further slowdown in Spain's economy. The euro was down to a two-week low against the dollar and the dollar index firmed up, putting pressure on the dollar-denominated industrial commodities like oil and copper.
Developments in Europe cast a shadow over any upbeat sentiment generated by government data that showed US crude inventories were down 2.45 million barrels last week, against analyst's expectations that they would be higher.
Anger against austerity measures being imposed on two of the worst hit economies spilled on the streets yesterday as demonstrators clashed with police in Athens and Madrid yesterday. According to the Bank of Spain, the country's gross domestic product fell at a "significant rate" in the third quarter, pushing down European equities to their worst session in two months.
Global equities registered a sharp dip as investors reacted to the euro-zone crisis and the slow pace of global economic growth and its effect on demand.
Meanwhile, vehicle owners looking for some quick relief from a recent drop in oil prices may be disappointed to find that fuel prices would remain steady.