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Oil Sinks Below $40 a Barrel With Demand Dropoff Looming

  • WTI crude closes below psychological level first time in month
  • Consumption seen weakening with summer driving season ending
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Photographer: Andrey Rudakov/Bloomberg
Updated on

Oil in New York closed below $40 a barrel for the first time in a month as a selloff in broader markets exacerbated concerns over weakening demand following a sluggish summer driving season.

U.S. benchmark crude futures tumbled nearly 4% on Friday, leading oil to post its worst week since June. Stocks weakened and the S&P 500 Index dropped more than 3% before easing losses. Meanwhile, the upcoming U.S. Labor Day holiday will mark an informal end to the summer driving months and a customary drop-off in demand is looming with refineries soon shutting for seasonal maintenance.