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Oil drops with stock market, other commodities

Oil drops with stock market, other commodities

The price of benchmark oil fell by 2 percent Thursday following a sharp decline on the U.S. stock market.
Benchmark oil for August delivery was down $1.61 to $78.60 at midday on the New York Mercantile Exchange. In London, Brent crude for August delivery was down $1.60 at $91.93 per barrel on the ICE Futures exchange.
A stronger dollar was also adding pressure on oil and other commodities.
Stocks dropped sharply after the Supreme Court upheld the central provision of President Barack Obama's health care overhaul, a requirement that almost all Americans carry health insurance. Stocks of major insurance companies fell sharply as analysts sorted through the ruling.
In Europe, expectations for the two-day EU summit beginning Thursday were low, especially as hopes for a deal on the joint issue of eurobonds faded following recent comments from German Chancellor Angela Merkel. In a raft of comments this week, Merkel has reiterated her opposition to the idea that is backed by the likes of France, Italy and Spain.
Crude has plummeted from $106 last month on expectations weak global economic growth will drag down oil demand. Some analysts expect crude to hover near $80 until U.S. demand picks up.
Signs of a weakening Chinese economy have also dragged oil prices lower. Citigroup estimates China will account for about half of global oil consumption growth this year.
In other Nymex futures trading, the price of natural gas dropped more than 3 percent following reports of an unexpectedly large increase in U.S. supplies.
The U.S. Energy Department said that natural gas, which is burned for heat in the winter and electricity in the summer, grew in supply by 57 billion cubic feet last week. That's more than the 51 billion to 55 billion cubic feet that analysts were predicting. Prices tend to fall as supplies go up.
Natural gas futures fell by 9.3 cents, or 3.3 percent, to $2.705 per 1,000 cubic feet in New York.
In other trading, heating oil lost 3.4 cents to $2.5597 per gallon while wholesale gasoline lost 2.11 cents to $2.5993 per gallon.


Updated : 2021-04-11 22:18 GMT+08:00