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Oil Closes Below $106, More Than 4 Percent Lower
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U.S. crude oil futures fell on Monday as profit-taking hit commodities markets amid mounting concerns about a slowing economy and continued banking and credit uncertainty.
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On the New York Mercantile Exchange, April crude [US@CL.1 Loading... ()] dropped $4.53, or 4.11 percent, to settle at $105.68 a barrel, trading as low as $103.23 after reaching a record $111.80.
In London, Brent [GB@IB.1 Loading... ()] was also lower.
Gold struck a record of $1,030.80 an ounce before falling to a $999.80.
Crude oil prices had risen by about 16 percent so far this year to the record high, driven in part by the weakness of the U.S. dollar, which makes raw materials priced in dollars relatively cheap, and as fund-managers seek a hedge against inflation.
Global stocks and the U.S. dollar fell sharply on Monday after JPMorgan Chase [JPM Loading... ()] agreed to buy rival investment bank Bear Stearns [BSC Loading... ()] for a rock-bottom price.
At the same time, the U.S. Federal Reserve expanded lending to securities firms for the first time since the Great Depression in an attempt to shore up confidence.
Ministers of the Organization of the Petroleum Exporting Countries have repeatedly said high oil prices are not related to fundamentals, but are the result of speculation and the U.S. dollar's fall.
"There is no problem at all with world oil inventories," Kuwait's acting oil minister Mohammad al-Olaim said in comments published by state news agency KUNA on Monday.
Some oil executives have also said fundamentals of supply and demand do not explain oil price strength.
"From the physical point of view there is no high alarm," Royal Dutch Shell's Chief Executive Jeroen van der Veer said at a news conference. "It's difficult to understand why the oil price is where it is."
But he said prices were expected to stay volatile.
"We think that is quite likely because there is so much uncertainty around it, whilst the physical flow is basically the same as when the oil price was a lot lower."
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Data is a real-time snapshot *Data is delayed at least 15 minutes
