Oil prices plummet further in Asian trade today
Oil prices fell further in Asian trade on Wednesday, with the market seeing weaker demand ahead, said dealers.india Updated: Jun 14, 2006 09:55 IST
Oil prices fell further in Asian trade on Wednesday, with the market seeing weaker demand ahead if central banks raise interest rates to curb inflation and thereby slow economic growth, dealers said.
At 10:45 am (0815 IST), New York's main contract, light sweet crude for July delivery, was down 28 cents to 68.28 US dollars a barrel from its close of 68.56 dollars in the United States on Tuesday, where it declined 1.80 dollars.
Brent North Sea crude for July delivery dropped 37 cents to 66.55 dollars.
"Oil has really been pulled down by the sell-off in commodities as a result of these inflation fears," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
Equities and commodity prices have fallen sharply in recent days amid growing investors' concern that the Federal Reserve and other central banks will get tough on inflation and raise interest rates.
"All markets that have been favored since 2000—housing, commodities, emerging markets, high-yield bonds and small-cap stocks—are now taking on water as the world's central banks make it clear that they are draining liquidity to counteract the potential for higher future inflation," said AG Edwards energy analyst Bill O'Grady.
The latest US economic data did nothing to soothe fears that the Federal Reserve would continue its campaign against inflation at its next meeting on June 28-29.
US wholesale prices rose by 0.2 per cent in May, but core prices excluding food and energy rose by a faster 0.