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Oil tumbles as global stocks slump

Aug 31 2010 10:46 Sapa

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Singapore - Oil prices fell below $74 a barrel on Tuesday in Asia, extending losses from the previous session as global stock markets slump after a disappointing US consumer spending number.

Benchmark crude for October delivery was down $1.13 to $73.57 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 47c to settle at $74.70 on Monday.

Oil traders have been following closely global stock markets as a barometer of overall investor sentiment. The Dow Jones industrial average dropped 1.4% on Monday after the Commerce Department said consumer spending in the US rose just 0.4% in July.

Most major Asian and European stock markets also fell Tuesday, led by a 3.6% plunge in Japan's Nikkei 225 index.

"Oil continues to spend much of its time trailing the stock market," Ritterbusch and Associates said in a report. "Bearish underlying fundamentals make it extremely easy for oil to drift lower in response to weakening equities."

Investors will be looking to August employment data for clues about the strength of the U.S. economy.

In other Nymex trading in September contracts, heating oil fell 1.82c to $2.007 a gallon and gasoline slid 1.15c to $1.923 a gallon. Natural gas for October delivery rose 2.6c to $3.838 per 1 000 cubic feet.

Brent crude was down 95c at $74.65 a barrel on the ICE futures exchange.

 
 
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