Investors Lose Confidence in Economy – Crude Oil Falls to One year Low

October 08 00:00 2011

New York, October 8 ( – For the third consecutive day, crude oil fell in New York amid the negative sentiment among investors that showed their lack of confidence in the US and European economies. As a result Brent oil dropped below $100 a barrel for the first time since February.

After European policy makers indicated that the terms of Greece’s bailout might be renegotiated, U.S. futures fell 2.5 percent. Federal Reserve Chairman Bernanke indicated that he has not yet given up his attempts to stimulate the economy and Saudi Arabian security forces were injured due to unrest in the kingdom. As a result of these developments prices pared on intraday loss.

Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut said that “Fears of recession are driving us lower,” and added that “Until we see some positive signals of the economic front, the market should move lower. We now have to find the next support level, which should be near $70.”

On the New York Mercantile Exchange, crude for November delivery dropped by $1.94 to $75.67 a barrel, the lowest settlement since Sept. 23, 2010. In the past three sessions, futures have fallen 7.9 percent. The rising production in Libya also pushed down the crude prices. Libya is aiming to raise output to more than 500,000 barrels a day by the end of October.