Oil prices dropped by more than 1 per cent on Tuesday, extending falls from the previous session as global financial markets tumbled lower in the wake of one of the biggest intra-day falls ever registered on Wall Street.
Brent crude futures were at $66.91 (£47.84) per barrel on Tuesday morning, down 71 cents, or 1.1 per cent, from the previous close. That was more than $4 below their high-point for 2018, hit last month.
US West Texas Intermediate (WTI) crude futures were at $63.46 a barrel, down 69 cents, or 1.1 per cent, from their last settlement and more than $3 off their 2018 high.
“The fall (in crude futures) is mainly attributable to a global sell off in equities,” said Sukrit Vijayakar, director at consultancy Trifecta Energy.
“People ran to the US dollar as a safe haven currency. Therefore the dollar strengthens. This makes commodities more expensive to buy, hence oil futures get sold off,” he added.
Financial markets went into a tailspin on Monday after a sharp rise in US bond yields that raised alarms over rising inflation and potentially higher interest rates.
The Dow Jones Industrial Average’s 4.6 per cent loss on Monday was its largest in percentage terms since August 2011, and the day’s 1,175 point loss was its biggest ever in absolute terms. The index was briefly down more than 6 per cent.
US S&P 500 futures tumbled 3 per cent in Asian trade on Tuesday, extending Monday’s sell-off.(INDEPENDENT).