Investing.com – Crude oil futures extended losses on Monday, tumbling to the lowest level since November after Standard & Poor’s downgraded the U.S. debt rating for the first time in history, underlining concerns over the economic outlook of the world’s largest oil consumer.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD83.83 a barrel during U.S. morning trade, dropping 3.75%.
It earlier fell as much as 4.7% to trade at USD82.58 a barrel, the lowest price since November 24, 2010.
Concerns over the U.S. economic outlook were exacerbated after ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA after markets closed Friday.
The ratings agency kept the U.S. rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and “America’s governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed.”
U.S. Treasury Secretary Timothy Geithner sharply criticized S&P’s decision, saying the ratings agency “has shown really terrible judgment and they’ve handled themselves very poorly”.
Global financial service provider Commerzbank said in a report earlier 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."
But Goldman Sachs said in a report published earlier Monday that oil's price fall was "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."
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery sank 3% to trade at USD106.25 a barrel, up USD22.42 on its U.S. counterpart.
Goldman reiterated its 2012 price forecast for Brent oil, saying it expected prices to average USD130 a barrel and recommended investors hold a “long” trading position on December 2012 contracts.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD83.83 a barrel during U.S. morning trade, dropping 3.75%.
It earlier fell as much as 4.7% to trade at USD82.58 a barrel, the lowest price since November 24, 2010.
Concerns over the U.S. economic outlook were exacerbated after ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA after markets closed Friday.
The ratings agency kept the U.S. rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and “America’s governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed.”
U.S. Treasury Secretary Timothy Geithner sharply criticized S&P’s decision, saying the ratings agency “has shown really terrible judgment and they’ve handled themselves very poorly”.
Global financial service provider Commerzbank said in a report earlier 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."
But Goldman Sachs said in a report published earlier Monday that oil's price fall was "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."
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery sank 3% to trade at USD106.25 a barrel, up USD22.42 on its U.S. counterpart.
Goldman reiterated its 2012 price forecast for Brent oil, saying it expected prices to average USD130 a barrel and recommended investors hold a “long” trading position on December 2012 contracts.