Oil futures drop below $87 a barrel on Tuesday as corporate-earnings reports raise concerns about weakness in the global economy and its impact on demand for crude.
By Polya Lesova
NEW YORK (MarketWatch) — Oil futures dropped below $87 a barrel on Tuesday as corporate-earnings reports raised concerns about weakness in the global economy and its impact on demand for crude.
Oil for December delivery fell $1.70, or 1.9%, to $86.95 a barrel in electronic trading on Globex. December crude, the new front-month contract, closed down 1.8% on Monday.
Stocks on Wall Street opened sharply lower on Tuesday, pressured by disappointing results from big companies such as DuPont and 3M. .
Oil, gold and other commodities also declined, while the U.S. dollar rallied.
Dollar strength makes dollar-denominated commodities more expensive for holders of other currencies. The dollar index , which measures the U.S. currency against a basket of six rivals, rose to 79.972 in morning trade from 79.653 in North American trading late Monday.
Also weighing on oil prices were news reports that the Keystone pipeline has been restarted after an outage that lasted several days.
Oil traders appeared to shrug off comments from Iran’s oil minister.
Rostam Qasemi said on Tuesday that his nation will stop oil exports if the U.S. and Europe add to the sanctions they have imposed on the Mideast economy, according to a report by Bloomberg News.
Speaking at a news conference in Dubai, Qasemi warned that oil prices would spike if Iranian oil exports were suspended. Iran’s economy, which is very dependent on oil revenue, has been crippled by sanctions.
