Worries about weaker economic growth dragged down oil prices yesterday. Oil has now fallen five of the last six trading days. It fell more than 6 per cent last week. Benchmark crude fell 96 cents, or 1 per cent, to finish at US$91.93 a barrel on the New York Mercantile Exchange. Prices for other petroleum products dropped, too. In London, Brent crude dropped US$1.61 at US$109.81 a barrel on the ICE Futures exchange. Germany delivered the latest dose of gloomy economic news, with its IFO index of business confidence falling for the fifth month in a row. Germany is an economic powerhouse, but 43 per cent of its exports go to its euro partners. And growth is stalling across the other 16 countries in the eurozone. Slower economies mean less demand for oil, pushing prices down. Phil Flynn, a senior market analyst for Price Futures Group, said he's surprised prices haven't fallen further. He said one reason could be that commodity funds have not been bailing out of oil. Still, oil prices have been under pressure from worries about Europe. The dollar has been stronger, which makes oil cheaper for holders of other currencies. "You're seeing demand destruction around the globe," he said. "You've got Saudi Arabia saying they're going to pump oil until the cows come home." All of that drives down oil prices, he said.
In other energy futures trading on the New York Mercantile Exchange:
-Natural gas fell 4.8 cents to settle at US$2.837 per 1,000 cubic feet.
-Heating oil fell 2.2 cents to US$3.0987 per gallon.
-Wholesale gasoline fell 2.49 cents to US$2.9176 per gallon.
US-listed shares of foreign companies fell on Monday, with energy shares among the biggest losers alongside a drop in oil prices. Asian shares led the way lower, with cyclical shares like energy and materials among the biggest decliners. The groups, which are closely tied to the pace of economic growth, had advanced in recent weeks on growing expectations for stimulus from central banks around the world. The US Federal Reserved announced new easing measures earlier this month, following similar actions from the European Central Bank. Since then shares have struggled for direction. While accommodative monetary policy is seen as limiting equity downside, market participants have few reasons to keep buying amid signs of stalling growth. Aluminium China dropped 0.7 per cent while oil firm CNOOC Ltd fell 1.5 per cent. Crude oil fell 1.7 per cent, extending its steep decline from last week. The BNY Mellon index of leading Asian ADRs fell 0.8 per cent, outpacing the 0.5 per cent dip in a broader index of American depositary receipts. The S&P 500 fell 0.3 per cent. The BNY Mellon index of leading European ADRs fell 0.5 per cent. European shares fell 0.3 per cent as a drop in German business sentiment pushed investors away from growth-oriented stocks. Among the most active European ADRs, BHP Billiton fell 0.8 per cent to US$62.86 and Rio Tinto lost 2.4 percent to US$48.21.
