Oil: Biggest drop in 17 years

Crude prices fall by largest dollar amount since 1991 as investors fear the decline in U.S. demand could spread overseas as Europe’s economies slow.

NEW YORK (CNNMoney.com) — Oil prices plummeted Friday, erasing the previous session’s spike, as the dollar strengthened and investors worried that a decline in demand will spread outside the United States.

U.S. crude for October delivery dropped $6.59 to settle at $114.59 a barrel on the New York Mercantile Exchange.


The drop in oil was the largest single-day slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On that day, President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War.

But in 1991, oil was trading at just $32 a barrel, so the more than $10 slide in dollar terms represented a record 33% drop. Oil fell 5.4% Tuesday, which does not even crack the top 50 price declines in percentage terms.

Oil’s second-largest slide on Friday comes a day after the second-largest gain on record. Crude futures soared $5.62 a barrel Thursday to rise above $121 a barrel.

“We’re trending towards a lot of oil price volatility on the direction of the dollar,” said Peter Beutel, an oil analyst with Cameron Hanover. “There are huge amounts of money involved, and the large moves have been based primarily on dollar strength.”

CNN