By Claudia Assis and Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures fell 5.3% Thursday, with investors dragging prices to their lowest levels in more than six weeks as traders deemed the Federal Reserve decision to extend debt maturities as unlikely to boost the economy and with it, demand for energy.
Crude-oil for November delivery CL1X -5.34% fell $4.62 a barrel, or 5.3%, to $81.57 a barrel on the New York Mercantile Exchange after tapping a low of $80.25.
A close around these levels would be oil’s lowest since early August.
Crude futures tracked the action in equity markets, which sold off around the globe on Thursday. In the U.S., the Dow Jones Industrial Average DJIA -3.34% traded at 10,771.18, down 354 points, or 3.2%. Read about U.S. stock market action.
“The drop is part of the worldwide economy [which] started with the Hong Kong stock market last night, which followed on through Tokyo, Seoul, and Europe,” said Charles Perry, chief executive officer at energy-consulting firm Perry Management.
On Wednesday, the Federal Open Market Committee said in its statement on monetary policy that the U.S. economy faces “significant downside risks,” spooking financial markets.
Strength in the U.S. dollar added pressure to crude prices, with the U.S. dollar index DXY +0.96% , which measures the currency against a trade-weighted basket of six other currencies, rose to 78.430 from 77.089 in late North American trading Wednesday.
Near term, Perry said he’s not that optimistic on oil prices. “Before it all settles out, I expect to see oil prices slowly decline to the $60-$70 range,” he said.
In the previous session, oil settled lower immediately after the conclusion of the two-day meeting of Fed policy makers. See earlier Futures Movers column.
Natural-gas futures were one of the few brighter spot on trading boards on Thursday, paring losses to trade near the flat line after a weekly government supply report showed an increase in the lower end of expectations.
Natural gas for October delivery NG11V -0.19% declined less than 1 cent to trade at $3.73 per million British thermal units on the New York Mercantile Exchange.
The Energy Information Administration said natural-gas inventories rose 89 billion cubic feet in the week ended Sept. 16. Analysts polled by Platts had expected an increase between 89 and 93 billion cubic feet.
