MW: Crude off more than 3% as economic concerns dominate
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) -- Crude-oil futures fell more than 3% early Tuesday, as concerns about the health of the global economy and its impact on energy demand sparked selling among traders.
Crude for December delivery fell $2.42 to stand at $59.98 a barrel in electronic trading on Globex.
Earlier, the contract hit an intraday low of $59.32 a barrel.
"Bullish news today on top of the recent Chinese stimulus package and news of Saudi Arabia's supply cuts failed to overcome economic concerns," said Sucden Research analyst Michael Davies.
Traders have been worrying in recent weeks that a sharp slowdown in global growth will inevitably spell reduced demand for oil.
"News this morning that China's crude-oil imports jumped by 28% in October from a year ago and that militants are threatening to renew attacks on oil facilities in Nigeria failed to lift prices," Davies wrote in a note to clients.
On Monday, crude rose 2.2% to close at $62.41 a barrel on the New York Mercantile Exchange.
China disclosed plans Sunday for a $586 billion economic-stimulus package aimed at reversing slowing growth in the world's most populous country. Energy traders were encouraged by the prospect of increased energy demand growing out of the plan.
In another bullish development, Saudi Arabia has reportedly told refiners in Asia that it would cut December supplies by 5%, the first such cutback in 14 months, according to Reuters.
Saudi Arabia is the largest oil producer within the Organization of the Petroleum Exporting Countries cartel. Last month, OPEC members agreed to cut the output quota of 28.8 million barrels per day by 1.5 million barrels starting Nov. 1.
Also in Globex trading Tuesday, December reformulated gasoline fell 5 cents, or 4%, to $1.31 a gallon and December heating oil dropped 4 cents to $1.96 a gallon.
And natural gas for December delivery sank 10 cents to stand at $7.14 per million British thermal units.
