Oil prices hit eight-month lows under 90 dollars
Crude oil prices slumped to eight month low points below 90 dollars a barrel on Monday as worsening financial turmoil triggered fears about slowing demand for energy, traders said.
Prices have slumped almost 40 percent in three months since they struck record highs of above 147 dollars in July.
Brent North Sea crude for delivery in November tumbled 3.54 dollars to 86.71 dollars a barrel in electronic deals.
New York's main contract, light sweet crude for November, shed 3.96 dollars to 89.92 dollars a barrel.
"The drops are down to concerns about growth in the world economy," senior energy analyst at John Hall Associates Damien Cox told AFP.
"There is a lot of concern what the impact of a slowdown will have on demand in the US, Europe and elsewhere."
Since striking their record highs, oil prices have fallen sharply on concerns that demand is slowing during the global financial crisis.
"A feature of ongoing tensions in the financial sector and increased concerns over the real economy impact is yet further sharp falls in the oil price," said Nick Matthews, an analyst at Barclays Capital in London.
Public-private rescue plan
On Sunday, French bank BNP Paribas announced it was taking control of ailing finance group Fortis' operations in Belgium and Luxembourg, in a deal that would make Belgium the largest shareholder in the French bank.
Germany also sealed a public-private rescue plan for the country's fourth biggest bank Hypo Real Estate as the government extended a blanket guarantee for all personal bank deposits to avert panic withdrawals.
The announcements came on the eve of a meeting of European finance ministers in Luxembourg. They were due on Monday to flesh out broad plans for restoring confidence in the crisis-struck banking system, agreed to over the weekend by Europe's biggest economic powers.
"The risks of a severe international economic slowdown, possibly extending to a recession in some developed economies, have increased as a result of the recent strains in the international financial system," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
"If there is a severe downturn in the international economy, oil prices could prove weaker than forecast," he said.
The oil market was also following developments in Nigeria, a major exporter of crude.
Militants behind a recent "oil war" in the country's Delta region freed on Sunday 19 local hostages but said they were detaining two Britons and a Ukrainian "for security reasons."
The rebels belong to the Movement for the Emancipation of the Niger Delta (MEND), which since its emergence in early 2006 has multiplied attacks, kidnappings of foreign oil workers and sabotage at oil installations on land and offshore.
It has caused Nigeria to lose one quarter of its oil production, recently ceding its place as the biggest crude oil producer in Africa to Angola.
Prices have slumped almost 40 percent in three months since they struck record highs of above 147 dollars in July.
Brent North Sea crude for delivery in November tumbled 3.54 dollars to 86.71 dollars a barrel in electronic deals.
New York's main contract, light sweet crude for November, shed 3.96 dollars to 89.92 dollars a barrel.
"The drops are down to concerns about growth in the world economy," senior energy analyst at John Hall Associates Damien Cox told AFP.
"There is a lot of concern what the impact of a slowdown will have on demand in the US, Europe and elsewhere."
Since striking their record highs, oil prices have fallen sharply on concerns that demand is slowing during the global financial crisis.
"A feature of ongoing tensions in the financial sector and increased concerns over the real economy impact is yet further sharp falls in the oil price," said Nick Matthews, an analyst at Barclays Capital in London.
Public-private rescue plan
On Sunday, French bank BNP Paribas announced it was taking control of ailing finance group Fortis' operations in Belgium and Luxembourg, in a deal that would make Belgium the largest shareholder in the French bank.
Germany also sealed a public-private rescue plan for the country's fourth biggest bank Hypo Real Estate as the government extended a blanket guarantee for all personal bank deposits to avert panic withdrawals.
The announcements came on the eve of a meeting of European finance ministers in Luxembourg. They were due on Monday to flesh out broad plans for restoring confidence in the crisis-struck banking system, agreed to over the weekend by Europe's biggest economic powers.
"The risks of a severe international economic slowdown, possibly extending to a recession in some developed economies, have increased as a result of the recent strains in the international financial system," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
"If there is a severe downturn in the international economy, oil prices could prove weaker than forecast," he said.
The oil market was also following developments in Nigeria, a major exporter of crude.
Militants behind a recent "oil war" in the country's Delta region freed on Sunday 19 local hostages but said they were detaining two Britons and a Ukrainian "for security reasons."
The rebels belong to the Movement for the Emancipation of the Niger Delta (MEND), which since its emergence in early 2006 has multiplied attacks, kidnappings of foreign oil workers and sabotage at oil installations on land and offshore.
It has caused Nigeria to lose one quarter of its oil production, recently ceding its place as the biggest crude oil producer in Africa to Angola.
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