Oil Drops below $100


Oil slipped below $100 a barrel on Thursday for the first time in two weeks, extending a hefty sell-off in the previous session on growing concerns an economic slowdown in top consumer the United States would undermine global energy demand.

U.S. crude was down $2.00 to $100.54 barrel by 1117 GMT (7:11 a.m. EDT), up from an earlier low of $99.59, the first time since March 5 that it has fallen below $100. It dropped almost $5 on Wednesday and is about $12 off the record $111.80 hit on Monday. London Brent crude fell $1.71 to $99.47 by 1059 GMT.

Gold dropped more than 4 percent to a one-month low Thursday, while platinum slid more than 5 percent to $1,820 an ounce, the lowest since early February as funds cashed in.

Oil and other commodities had struck a series of record highs since the beginning of the year as investors fled stocks markets and took refuge in dollar-denominated assets. U.S. oil prices averaging around $97 a barrel since the beginning of this year, up from $72.30 in 2007.

But investors nervous about the economy are cashing in on recent record prices in commodities and energy.

The data showed lower fuel stocks than forecast, but the figures also revealed a fall in demand.

U.S. demand for gasoline over the past four weeks was 0.1 percent below last year, the U.S. Energy Information Administration figures showed.


TradingEconomics.com, Reuters
3/20/2008 6:46:03 AM