Oil Prices Tumble On Fears Of Sluggish Global Economy
NEW YORK, N.Y. - Oil dropped to a six-month low Thursday as investors continued to worry about sliding energy demand and a sluggish U.S. economy.
Crude for September delivery closed down $5.30, or 5.8 per cent, at US$86.63 a barrel on the New York Mercantile Exchange, the lowest close since mid-February.
Thursday's trading also marked oil's biggest one-day drop since early May.
Oil has been sliding as investors focus on a slowdown in the U.S. economic recovery and weaker manufacturing growth in China.
A stronger dollar also pushed oil lower on Thursday. Oil, which is priced in dollars, tends to fall as the dollar rises and makes crude more expensive for investors holding foreign money.
The dollar rose Thursday after Japan and Switzerland moved to weaken their currencies. The yen and Swiss franc surged recently as investors worried about slowing economies in Europe and the U.S. sought so-called "safe haven" currencies.
As the currencies of those countries strengthened, their goods became more expensive in overseas markets. Switzerland's central bank took steps Wednesday to curb the value of the franc, while the Japanese did the same for the yen on Thursday.
Crude prices have dropped for seven straight days, paralleling a sell-off on Wall Street. The Standard & Poor's 500 index, the Nasdaq and the Dow Jones Industrial Average sank as much as three per cent on Thursday. The Dow is down more than 1,000 points since July 21.