LONDON—Nymex crude-oil futures bounced off Friday's early lows, but remained in negative territory as fears of another economic downturn roiled commodities markets.
The front-month September contract on the New York Mercantile Exchange was trading down 42 cents, or 0.5%, at $86.21 a barrel. The front-month September Brent contract on London's ICE futures exchange was up $1.19, or 1.1%, at $108.44 a barrel.
In the London day, Nymex oil seemed to be stabilizing, and even strengthening slightly, following the rout in early Asian trade, as investors settled in to await the release of U.S. employment data, a key indicator of the economic health of the world's largest oil consumer.
But fear about euro-zone debt and the potential for another recession continued to grip oil markets and investors scrambled to pull out of risky commodity assets.
"Commodities are a bet on growth, and in the last week the growth story has been severely punctured. No growth means stagnant commodity demand," said David Hufton at PVM Oil Associates.
In early Asia trade, Nymex oil fell more than 4%, breaking through several key support levels to hit $82.87 a barrel, the lowest since Nov. 26, as sentiment deteriorated following the plunge in equities markets that started Thursday and dragged other asset classes lower.
Brent September crude fell 2.8% in early trade to a low of $104.30 a barrel.
Traders said the funds that trade on the closing price of Nymex crude came in Friday morning and sold oil, exacerbating the slide.
"It's an equity-led dump and all the people who are losing money on equities get out of commodities to pay their margins," said Andy Riddell head of derivatives at London Capital Group.
Underlying fundamentals such as higher output from the Organization of the Petroleum Exporting Countries, the end of stimulus measures and restrictive monetary policies, are also playing into the more bearish sentiment seen in the markets, analysts said.
