The US WTI Crude Oil price dropped sharply Wednesday and broke the important support mar at 90 bbl as protests in Spain and Greece added to concerns about the Eurozone debt crisis.
Protests against the government’s austerity measures erupted in Athens on Wednesday and turned violent. Similar protests occurred earlier in Madrid. The situation fueled uncertainties about the two countries’ ability to resolve their serious debt problems.
The Bank of Spain said that the Spanish economy slowed “at a significant rate” in the third quarter.
Spain’s 10-yr bond yield topped 6% Wednesday for the 1st time in the week, and the Euro fell to a 2 wk low against the USD on rising concerns. A strengthening Greenback also weighed on the USD-denominated commodities.
Investors are concerned about the global economic prospects after a series of weak signs.
The Energy Information Administration said that US Crude Oil inventories dropped by 2.4-M bbls in the week ended 21 September. The decrease came in as Crude Oil imports fell sharply in the week, overshadowing a moderate rise in domestic production.
Even with this decline, US commercial Crude Oil inventories still stood at 365.2-M bbls, extremely high and above the historical upper limit.
Escalating tensions over Iran’s controversial nuclear program helped limit the losses in Crude Oil prices.
WTI Light, Sweet Crude for Nov delivery lost 1.39, or 1.52%, to settle at 89.98 bbl on the New York Merc, after dipping to the lowest intraday level of 88.95 bbl. This is the 1st time for US Crude Oil rude to settle under 90 since 3 August.
In London, Brent Crude for Nov delivery fell 0.41, or 0.37%, to close at 110.04 bbl.
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