SINGAPORE: Brent crude lost more than $1 on Thursday on concerns oil consumption may fall, as steps announced by the US Federal Reserve were seen as possibly insufficient to jump-start an economy the central bank said faces significant downside risks. Brent futures fell $1.72 a barrel to $108.64 by 0517 GMT, after slumping as low as $108.48. US crude fell $1.46 to $84.46, after slipping to $84.05. The Fed said it would extend the maturity of its treasury holdings but didn't offer more aggressive measures to boost the world's biggest economy. The comments overshadowed data showing US crude stocks posted their biggest weekly drop in more than nine months, along with a rise in gasoline stocks. "It is hard to ignore the macroeconomic picture. Oil seems to have fallen in line with equity markets," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp. "Otherwise, the data on crude stocks was fairly bullish for oil. Prices shouldn't have fallen so low, based on just oil fundamentals." Adding further pressure on prices was data showing China's factory sector shrunk for a third consecutive month in September as flagging overseas demand put the brakes on new orders, HSBC's China Flash PMI showed. US equities suffered their worst drop in a month after the Fed's comments, while gold slumped 1 per cent and copper fell to near the day's low. The Fed said it had discussed a variety of other policy tools to promote stronger growth, but stopped short of announcing any more measures. The bank plans to extend the maturity of Treasuries, buying $400 billion in long-term notes, while selling an equivalent amount of bonds maturing in three years or less by mid-2012.

Source