IMF’s GDP growth downgrade for U.S., Japan cited as a reason
By Virginia Harrison , MarketWatch
SYDNEY (MarketWatch) — Crude-oil futures extended losses in electronic trading Tuesday, as the impact of global growth forecasts and profit-taking took pressure off prices.
The losses came despite reports that a possible Libyan peace deal was in tatters, after being rejected by rebel forces.
Light, sweet crude for May delivery (CLK11 109.36, -0.56, -0.51%) fell $1.96, or 1.8%, to $107.98 on the New York Mercantile Exchange.
On Monday, oil breached $113 a barrel in Asian trading hours, but gave up the gains during the North American session to deliver contract’s biggest one-day loss in a month.
IG Markets strategist Ben Potter said the drop came after the International Monetary Fund downgraded its gross domestic product growth estimate for the U.S. and Japan. Potter also cited Goldman Sachs’s exit from a large commodities basket as a drag on oil prices. Read more about the IMF’s global report card.
Goldman Sachs advised investors to lock in commodity trading gains, according to a Reuters report.
The drop came even as a cease-fire deal reportedly brokered by the African Union with embattled leader Col. Moammar Gadhafi was rejected by rebel forces on Tuesday.
The war-torn nation’s rebel council refused to agree to the peace proposal because it did provide for the departure of Gadhafi, the reports state.
The break-down came amid reports that civilians including children were being killed in the rebel-held city of Misrata, Libya’s third largest city.
