Filed under: International markets, Forecasts, Commodities, Oil, Federal Reserve, Recession

Oil plunged more than $8 to about $136 Tuesday at mid-day after Fed Chairman Ben Bernanke’s indicated the risks to U.S. growth have increased as a result of credit market losses, Bloomberg News reported Tuesday.

Oil fell $9.26 to $135.92 per barrel before recovery slightly. Oil hit a record of $147.27 per barrel on July 11.

The other major energy commodities, likewise, plummeted on the news. Heating oil plunged almost 15 cents to $3.91 per gallon, unleaded gasoline sank almost 17 cents to $3.39 per gallon, and natural gas plunged 44 cents to $11.51 per million BTUs.

“Oil in free-fall”

Energy trader Jim Dietz said “a mini selling frenzy” hit the oil market after Bernanke indicated the U.S. economy was likely to slow further.

“We did have some support for an oil-long trade earlier as an investment when few other investments are working, but that sentiment was quickly wiped out by Bernanke’s comments,” Dietz said. “We had oil in free-fall for about an hour. The market put ‘two and two together.’ We had the Fannie Mae and Freddie Mac bailout news yesterday [Monday] and Bernanke’s bearish comments today. That led a lot of people to conclude we’re going to see a slowdown in oil demand growth, which means lower prices.”

Continue reading Oil plunges $8 to $136 on fear of deeper U.S. recession

Permalink | Email this | Comments

Via [bloggingstocks]

Share This

This entry was posted on Wednesday, July 16th, 2008 at 12:13 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.