Oil fell more than 5 percent today after American International Group Inc. had its credit rating cut, threatening efforts to raise funds to keep the insurer afloat, and Lehman Brothers Holdings Inc. yesterday sought bankruptcy protection.
Crude oil for October delivery fell as much as $4.88, or 5.1 percent, to $90.83 a barrel, the lowest intraday price since Feb. 8. It was at $91.36 at 12:50 p.m. London time on the New York Mercantile Exchange.
Oil has declined 5 percent this year and dropped 37 percent from the record $147.27 a barrel reached on July 11.
Gasoline for October delivery fell for a second day, declining as much as 9.03999 cents, or 3.5 percent, to $2.471 a gallon in New York.
The plunge in oil, cotton and copper led to the Reuters/Jefferies CRB Index of 19 commodities erasing its gains for the year. The CRB index fell 3.3 percent to 348.26 yesterday, down 2.9 percent for the year.
Gold declined as some investors sold the precious metal to raise cash after U.S. stocks tumbled.
Gold for immediate delivery fell 1.86 percent to $772.05 an ounce at 12:40 p.m. in London after earlier rising to $788.10 an ounce, the highest in a week. Silver for immediate delivery dropped 1.4 percent to $10.9750 an ounce.
Brent crude oil for November settlement fell as much as $5.04, or 5.4 percent, to $89.20 a barrel on London's ICE Futures Europe exchange. It was at $89.70 a barrel at 12:51 p.m. London time.
Prices have dropped 14 straight days, the longest stretch since Brent futures were introduced in 1988.
Texas oil refiners may need weeks to restore normal operations as utilities struggle to restore power after Hurricane Ike swept through the region.
The International Energy Agency, an energy adviser to 27 industrialized countries, said it is analyzing the impact of Ike on oil, gas and refinery output and may release emergency stockpiles if called upon. The IEA coordinated the release of crude oil and fuel supplies after Hurricanes Katrina and Rita struck the U.S. Gulf Coast in 2005.