Oil sinks to 6-week low on U.S. recession fears

LONDON (Reuters) – Oil fell to a six-week low on Tuesday, dragged lower by a stock market plunge and fears a slowdown in the United States could have a much wider impact than previously thought.

Speculative funds have begun to sell positions in oil markets and other commodities as they readjust portfolios, analysts said.


U.S. crude fell to a low of $86.11 a barrel, its weakest since December 6 and by 7:43 a.m. EST was trading at $87.40.

The level was down $3.17 from Friday’s settlement. There was no settlement on Monday as floor-trading was closed for a U.S. public holiday.

London Brent crude fell $1.33 to $86.18 a barrel.

“There’s a lot of fear out there. That could make some market participants go into cash until the situation becomes clearer,” said Mike Wittner of Societe Generale.

The sell-off has taken oil prices below a range of roughly $90-$100 a barrel sustained since late October.

Reuters