BLBG: Crude Oil Futures Plunge in Biggest Two-Day Drop in 14 Months on Forecasts
Oil fell in the biggest two-day drop in 14 months after the International Energy Agency and International Monetary Fund said that prices above $100 a barrel are starting to hurt the global economy and Goldman Sachs Group Inc. forecast a “substantial” correction.
Oil plunged as much as 3.9 percent after the IEA reported signs of an oil-demand “slowdown” in its monthly Oil Market Report today. The IMF cut its growth forecasts yesterday for the U.S. and Japan, two of the top three oil-consuming countries. Brent oil may drop more than $15 to $105 a barrel, Goldman said in a note to clients today.
“Right now, we’re in free-fall range,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania. “We have a market condition that was way overbought, so now its length is getting stomped out of the market. There could be a ways to go in this selloff.”
Crude for May settlement fell $4.14, or 3.8 percent, to $105.78 a barrel at 11 a.m. on the New York Mercantile Exchange. Prices have tumbled 6.2 percent since April 8, the biggest two- day retreat since Feb. 4 and Feb. 5, 2010. Futures have risen 25 percent in the past year and settled at a 30-month high of $112.79 on April 8.
Brent oil for May settlement fell $3.60, or 2.9 percent, to $120.38 a barrel on the ICE Futures Europe exchange in London.
China is the second-biggest oil-consuming country.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.
