Oil dropped more than 4 percent as U.S. stock index futures declined along with stocks in Europe and Asia. European confidence in the economic outlook fell to the lowest on record, the European Commission in Brussels said today, and unemployment in the region rose to a two-year high.
Crude oil for February delivery traded fell $1.76, or 4.1 percent, to $40.87 a barrel in electronic trading on the New York Mercantile Exchange, trading for $40.98 as of 1:38 p.m. London time. In London, Brent futures fell 98 cents to $44.88.
Yesterday, futures dropped $5.95 to $42.63 a barrel, the lowest settlement since Dec. 30. That was the biggest percentage decline since Sept. 24, 2001.
Crude earlier rose as much as 2.4 percent to $43.63 as rocket attacks on Israel launched from Lebanon spurred concerns that the widening conflict in Gaza will disrupt Middle East supplies, and as Venezuela and Angola signaled compliance with OPEC production cuts agreed on last month.