Oil prices tumbled to below $80 a barrel for the first time in eight months and Brent crude fell to under $90 a barrel. Futures dropped as much as 3 percent as manufacturing slumped in the U.S., China and Europe, applications for U.S. unemployment benefits exceeded estimates, and sales of existing homes were lower than expected.
“The oil market is finally starting to catch up with the weak fundamentals,” said Rick Mueller, a principal with ESAI Energy LLC in Wakefield, Massachusetts. “The U.S. and Chinese economies are looking weaker, which is raising concerns about demand during the second half of the year.”
Crude futures for August delivery fell $2.75 to $78.70 a barrel at 1:45 p.m. on the New York Mercantile Exchange after dropping to $78.47, the lowest intraday level since October.
Brent oil for August settlement decreased $2.97, or 3.2 percent, to $89.72 a barrel on the London-based ICE Futures Europe exchange.