Crude Dives Below USD106
Crude oil prices dipped below $106 a barrel Tuesday in Asia — $10 below its close Friday before the Labor Day weekend — as investors shifted their focus to slowing global demand after worries about Hurricane Gustav subsided.
Light, sweet crude for October delivery was trading at $106.09 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore, and at one point dropped as low as $105.46.
Traders were relieved that Gustav weakened as it approached the offshore oil rigs and Louisiana refineries, and appeared to have caused less damage than expected in New Orleans and surrounding areas.
But they quickly turned their attention to slowing global economic growth, speculating that will dampen demand for crude oil, even in developing countries such as China and India.
The same analysts that bulled crude up just a short time ago with talk of $150, $200 and more are now looking for prices to test $100/barrel in the next few days.
OPEC is scheduled to meet Sept. 9 and has indicated it may take action to defend the $100 a barrel level.
Light, sweet crude for October delivery was trading at $106.09 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore, and at one point dropped as low as $105.46.
Traders were relieved that Gustav weakened as it approached the offshore oil rigs and Louisiana refineries, and appeared to have caused less damage than expected in New Orleans and surrounding areas.
But they quickly turned their attention to slowing global economic growth, speculating that will dampen demand for crude oil, even in developing countries such as China and India.
The same analysts that bulled crude up just a short time ago with talk of $150, $200 and more are now looking for prices to test $100/barrel in the next few days.
OPEC is scheduled to meet Sept. 9 and has indicated it may take action to defend the $100 a barrel level.
