Oil prices fell yesterday after reports of swelling inventories and forecasts of record US and Russian output combined with a sharp sell-off in stock markets as the outlook for global growth deteriorated. US crude oil dropped $2,04, or 4,1 percent, to a low of $47,84, its weakest since September 2017. It recovered to around $49,28, down 60 cents, by 1420 GMT. North Sea Brent lost $2,41, or 4 percent, to $57,20, a 14-month low. Brent last traded around $59,01, also 60 cents lower.
Both oil benchmarks have shed more than 30 percent since early October due to swelling global inventories. World stock markets tumbled yesterday as fears about a slowing global economy gripped investors, just as the US Federal Reserve looked set this week to deliver its fourth interest-rate hike of the year.
Investor confidence is deteriorating with more fund managers expecting global growth to weaken over the next 12 months, the worst outlook in a decade, Bank of America Merrill Lynch’s December investor survey showed. Japan’s Nikkei lost 1,8 percent after US stocks dropped to their lowest in more than a year.
“A large part of the move is due to a broader market sell-off, with both US and Asian equity markets coming under pressure,” said commodities strategist Warren Patterson at Dutch bank ING in Amsterdam.