LONDON, March 19: Crude oil and gold prices plunged from recent record heights on Wednesday, as markets were rattled by concerns that ongoing global economic turmoil would dent demand for commodities, analysts said.
New York’s main oil contract, light sweet crude for delivery in April, plummeted $4.22 to $105.20 per barrel. The contract, which had hit a record peak of $111.80 on Monday, expires at the close.
Brent North Sea crude for May sank $4.27 to $101.29. It struck an all-time peak of $107.97 on Monday.
And on the London Bullion Market, the price of gold tumbled as low as $941.48 per ounce. The precious metal had forged an historic pinnacle of $1,0037.70 on Monday.
Meanwhile, the US Energy Information Administration said Wednesday that American crude stockpiles rose by just 200,000 barrels last week. That was far less than market expectations for a gain of 2.3 million barrels.
“The data was a tad bullish... but I wouldn’t say it’s earth-shattering again, because sentiment has changed,” said MF Global analyst Mike Fitzpatrick.
“Previously the market was willing to discount negative news (with higher oil prices) ... now sentiment has gone the other way.”
So far this week, the oil market has faced a rollercoaster ride.
Prices surged on Monday to historic heights on the back of the plunging US dollar, which hit a record low against the euro. The weak US currency encourages demand for dollar-priced commodities because they become cheaper for buyers using stronger currencies.—AFP
