Investing.com - Crude oil futures fell to near nine-month lows in early Asian trade Monday, as the U.S. credit rating downgrade sent investors scurrying from riskier assets in expectation of a slowdown in the world’s largest economy.
On the New York Mercantile Exchange light, sweet crude futures for September delivery traded at USD79.61 a barrel during early Asian trade, falling 1.63%, after hitting a daily high of USD81.29.
Oil prices were down USD13 a barrel since the beginning of August.
Investor pessimism on the U.S. economic outlook was deepened after ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA-plus from AAA late last Friday.
Standard and Poor’s ratings outlook remained at negative, meaning another possible downgrade could be in store within the next 12 to 18 months.
The downgrade sent Wall Street shares to their sixth worst drop in history Monday, as the Dow Jones Industrial Average plummeted 5.6%, the Nasdaq Composite Index sank 6.9%, and the S&P 500 fell sharply by 6.7%.
Meanwhile, financial service provider Commerzbank said in its report that, “Further losses can be expected in the near term, as financial investors should reduce risk positions on the back of high risk aversion and the uncertain economic outlook."
Goldman Sachs, in an earlier Monday report, said falling oil prices were “a good opportunity for consumers to begin to hedge their forward oil exposure on expectations of world economic growth continuing to drive oil demand growth."
Goldman’s 2012 price forecast for Brent oil was for prices to average USD130 a barrel.
On the ICE Futures Exchange Brent oil futures for September delivery fell 1.77% to trade at USD102.53.
On the New York Mercantile Exchange light, sweet crude futures for September delivery traded at USD79.61 a barrel during early Asian trade, falling 1.63%, after hitting a daily high of USD81.29.
Oil prices were down USD13 a barrel since the beginning of August.
Investor pessimism on the U.S. economic outlook was deepened after ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA-plus from AAA late last Friday.
Standard and Poor’s ratings outlook remained at negative, meaning another possible downgrade could be in store within the next 12 to 18 months.
The downgrade sent Wall Street shares to their sixth worst drop in history Monday, as the Dow Jones Industrial Average plummeted 5.6%, the Nasdaq Composite Index sank 6.9%, and the S&P 500 fell sharply by 6.7%.
Meanwhile, financial service provider Commerzbank said in its report that, “Further losses can be expected in the near term, as financial investors should reduce risk positions on the back of high risk aversion and the uncertain economic outlook."
Goldman Sachs, in an earlier Monday report, said falling oil prices were “a good opportunity for consumers to begin to hedge their forward oil exposure on expectations of world economic growth continuing to drive oil demand growth."
Goldman’s 2012 price forecast for Brent oil was for prices to average USD130 a barrel.
On the ICE Futures Exchange Brent oil futures for September delivery fell 1.77% to trade at USD102.53.