Investing.com – Crude oil futures were down sharply on Monday, trading close to a nine-month low after Standard & Poor’s downgraded the U.S. debt rating for the first time in history, prompting investors shun riskier assets.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD84.02 a barrel during European morning trade, plunging 3.5%.
It earlier fell as much as 4.1% to trade at a daily low of USD83.19 a barrel, hovering close to the previous session’s nine-month low of USD82.89 a barrel.
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.”
The downgrade exacerbated concerns over the U.S. economic outlook and weighed on future demand expectations from the world’s largest oil consumer.
Global financial service provider Credit Agricole lowered its one-month price forecast for crude to USD85 a barrel, citing the uncertain economic outlook, it said in a report on Friday.
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 dropped 2.6% to trade at USD106.68 a barrel, up USD22.66 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 USD84.02 a barrel during European morning trade, plunging 3.5%.
It earlier fell as much as 4.1% to trade at a daily low of USD83.19 a barrel, hovering close to the previous session’s nine-month low of USD82.89 a barrel.
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.”
The downgrade exacerbated concerns over the U.S. economic outlook and weighed on future demand expectations from the world’s largest oil consumer.
Global financial service provider Credit Agricole lowered its one-month price forecast for crude to USD85 a barrel, citing the uncertain economic outlook, it said in a report on Friday.
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 dropped 2.6% to trade at USD106.68 a barrel, up USD22.66 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.