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Oil dives on new economic fears
15.09.08
The oil price tumbled as much as $7 a barrel this afternoon as the Lehman Brothers collapse sparked renewed fears about the state of the global economy.
Brent crude in London plunged to nearly $91 a barrel at one stage before recovering slightly to be $5.75 down at $91.83.
Economists said such a sharp fall could ease the pressure on global business and consumers, but the reality was that the crash is largely down to fears the world's economy will decline so dramatically that there will be a huge fall in demand. The fact that Hurricane Ike missed Gulf of Mexico refineries also pushed the price down.
Rob Laughlin at MF Global said: “Oil has fallen because Ike's legacy will not be long-lasting, but also because of the carcasses on Wall Street. The ramifications of the Lehman fallout will be felt for some days.”
The ICE exchange, where Brent is traded in London, suspended Lehman's access to the market.
