PRICES of oil plunged near the $86/barrel mark in Asia on Friday in the midst of uncertainties that China and Europe’s interest rate reductions will be enough to contain an economic downturn.
August delivery’s oil benchmark fell $1.16 at $86.06/barrel during mid-afternoon e-trading Singapore time on the NYMEx as prices of crude fell $0.44 to end at $87.21 in New York, Thursday.
August delivery for Brent crude in London fell $1.23 at $99.45/barrel on ICE Futures market.
Chinese and European central bank officials on Thursday slashed lending rates while Bank of England vowed to strengthen financial circulation in a move to steer a laggard economic situation.
Some experts pointed out that efforts were not fundamentally abrupt to trigger an economic rebound while others see more positive measures in the offing as the world economy sags.
Crude has fallen from $106.10 60 days ago as the political and economic woes of the Euro Zone hounds worldwide growth forecasts.
Traders have shrugged off a bigger than anticipated fall in crude supplies in the United States, which indicated demand could be on the rise.
The Energy Information Agency of the Department of Energy on Thursday announced that stockpiles for crude dipped 4.2 million barrels during the last seven days while experts forecast a decrease of around two million barrels.
The June jobs data of the United States, which is due late Friday, may offer another cue for the crude market. Investors are predicting the economy infused around 90 thousand jobs for the month and jobless level remained flat at 8.1 percent.
Prices of heating oil fell $0.22 at $2.74/gallon and gas futures inched $0.18 to $2.74/gallon. Natural gas soared $0.03 to $2.98 per 1 thousand cu. ft.
In other development, the US is ready to summon for rigid United Nations penalties versus Syrian leader Bashar Al Assad including his minions during the “Friends of Syria” summit involving more than one hundred Arab and Western countries in Paris on Friday.
However, despite the murder of over 16 thousand people in the almost one year and a half revolt, major allies of Syria – China and Russia that both wield powerful veto rights in the UN – will not be present.
The summit follows a Tunis gathering and another in Turkey. These two summits called for stricter measures versus the administration of Pres. Assad.
Beijing was not present in those gatherings that Germany, Britain, France, the US, Qatar and Saudi Arabia spearheaded a delegation of over 60 nations, including most states belonging in the Euro Zone and Arab League countries.
According to a high-ranking US official, it was “time to arrange everything under a resolution that jacks up the pressure against Assad, and that includes getting real, tough consequences like a crippling economic sanction.