Oil prices hit 14-month low as US and European stocks slide again

Published 17.12.2018 23:23
Updated 18.12.2018 09:14
emAFP Photo/em
AFP Photo

Wall Street's main indices touched multi-month lows as oil prices fell to a 14-month low on Monday on signs of oversupply in the United States and as investor sentiment remained under pressure from concern over the prospects for global economic growth and fuel demand.

U.S. light crude ended Monday's session down $1.32, or 2.6 percent, to $49.88, settling below $50 for the first time since October 2017. The contract fell to $49.09 a barrel after the settlement, hitting the lowest level on an intraday basis since Sep. 13, 2017.

Brent crude oil was down 80 cents, or 1.3 percent, at $59.48 per barrel by 2:30 p.m. ET, after earlier rising as high as $61.21.

U.S. crude futures fell after inventories at the storage hub of Cushing, Oklahoma rose by more than 1 million barrels between Dec. 11 and Dec. 14, traders said, citing data from market intelligence firm Genscape.

Major European stock markets also fell on Monday, with the London stock market, already beset with Brexit concerns, taking an additional knock after British online fashion retailer ASOS issued a profit warning.

London's blue-chip FTSE 100 fell 1.1 percent, as did the CAC 40 in Paris, while the DAX 30 in Frankfurt shed 0.9 percent.

On Wall Street, both the Dow and S&P, which have fallen into correction territory, touched multi-month lows before paring their losses. The Nasdaq composite briefly rallied into positive territory.

The S&P 500 was down to its lowest in more than a year while the Dow fell 400 points amid its worst start to December since 1980.

Health insurers and hospitals are also falling after a federal judge in Texas ruled that the 2010 Affordable Care Act is unconstitutional. Retailers and technology stocks are sinking as well.

The losses came at the start of a busy week packed with central bank interest rate decisions.

The U.S. Federal Reserve will conclude its rate-setting policy meeting Wednesday and while expectations are for another hike in borrowing costs, comments from chairman Jerome Powell will be closely watched for an idea of its plans for 2019.

The Bank of England will follow suit on Thursday with its latest monetary policy decision.

The European Central Bank last week held interest rates steady as it ended its crisis-fighting economic stimulus known as quantitative easing (QE).

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