Oil prices dive as economic fears mount

NEW YORK: Oil prices plunged almost nine percent Monday in New York as markets were gripped by fresh worries about the slumping economy and weaker energy demand.

New York’s main futures contract, light sweet crude for May delivery, tumbled to 45.88 dollars a barrel, a drop of 4.45 dollars (8.84 percent) from Friday’s close.

In intraday trade, it fell to a month-low of 45.50 dollars.

In London, Brent North Sea crude for June delivery shed 3.49 dollars (6.5 percent) to settle at 49.86 dollars.

“It’s a correction wiping out gains which didn’t seem in line with supply and demand fundamentals,” said Antoine Halff, vice president of NewEdge Group.

Independent analyst Ellis Eckland said that “markets across the board have returned to risk aversion.”

Traders since early March have tracked a spectacular rebound on stock markets from heavy losses, pushing oil up to about 50 dollars a barrel.

But Wall Street stocks were tanking Monday, and the major European equities indexes closed sharply lower.