Oil Prices Skid Under $77
Source: The Wall Street Journal, Jerry Dicolo (8/12/10)
"Investors run to safer assets on worries about economic recovery."
Light, sweet crude for September delivery recently traded $1.82, or 2.4%, lower at $76.20 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded down $1.78 at $75.86 a barrel.
Oil extended losses after falling 2.8% Wednesday, with the drop sparked by weak economic reports across the globe. Data from China and Japan suggest that international markets won't be able to make up for the slowing recovery in the U.S
Meanwhile, the number of U.S. workers making new claims for jobless benefits rose by 2,000 last week, the Labor Department reported Thursday. Economists had predicted filings would fall by 14,000, according to a Dow Jones Newswires survey.
Weekly inventory data from the Department of Energy released Wednesday showed only modest changes to the supply picture.
High supplies and a weakening economic picture have again left oil futures to trade between $70 and $80 a barrel, a range that has confined crude for most of the past few months. Amid uncertainty about economic growth, crude is taking cues from the equities markets as a proxy for future demand.
Dow Jones Industrial Average futures were recently down 79 points to 10299.
"The ghosts of a global economic slowdown are back and haunting the oil market again," said Barclays's oil analysts in a client note.