Brent crude tumbled below $100 a barrel for the first time in almost eight months, reaching a level targeted by Saudi Arabia’s oil minister, amid rising U.S. unemployment and slowing Chinese industrial growth.
Brent plunged to its lowest intraday level since February 2011, while in New York prices dropped to their lowest in almost eight months, as the dollar rose after data showed American employers in May added the smallest number of workers in a year and China’s manufacturing grew at the weakest pace since December. Saudi Arabian oil output advanced to the highest level since 1989, according to a Bloomberg survey.
“It’s a really poisonous cocktail,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “In the oil market we have a mixture of weak demand, ample supplies, some nervous investors and a stronger U.S. dollar.”
Brent futures for July settlement fell as much as $4.17, or 4.1 percent, to $97.70 a barrel on the ICE Futures Europe exchange, the weakest level since Feb. 8, 2011. It traded for $98.34 at 1:42 p.m. London time, bringing its decline this year to 8.4 percent.
West Texas Intermediate futures for July delivery fell as much as $3.97 to $82.56 a barrel on the New York Mercantile Exchange, the weakest since Oct. 7, and was at $82.86 in electronic trading at 1:48 p.m. London time. The benchmark contract is heading for its longest losing streak in 5 1/2 years.