Stock market, Korea tension bring down oil prices
Oil prices continued their three-week slide yesterday, pulled down by falling global stock markets, a declining euro and saber-rattling in Korea.
Benchmark crude for July delivery dropped US$1.46 to settle at US$68.75 a barrel on the New York Mercantile Exchange. On Monday the contract rose 17 cents to settle at US$70.21.
Oil prices have fallen 22 per cent in the past three weeks, a slump that started with worries about the European debt crisis escalating and spreading globally.
Stock markets around the world fell yesterday on worries that Europe’s problems will slow global growth and demand for crude and gasoline. The Dow Jones Industrial Average was down more than 200 points and below the 10,000 mark for most of the day. It cut almost all the loss to close down about 23 points. The NASDAQ closed down slightly as well. The S&P 500 closed a little higher.
The euro slid against the dollar to around the four-year low it hit last week. Because crude is traded in dollars, it becomes more expensive for holders of other currencies when the dollar gets stronger.
Traders also moved into the dollar and safer investments on reports that North Korean leader Kim Jong Il ordered his military to combat alert after South Korea blamed the North for sinking a South Korean warship two months ago.
