Futures Market News
Oil futures drop as analysts point to weak stimulus plan
Sep 22, 2011 11:25 AM
Oil futures slipped to their lowest price in four weeks after the U.S. central bank noted the nation's economy is struggling, according to Bloomberg.
As the globe's top consumer of the energy commodity, the U.S. announced on Wednesday it will acquire $400 billion of long-term debt as a method of staving off a double-dip recession. Manufacturing in China, trailing only the U.S. for oil consumption, is likely to reduce this month, according to a Thursday report.
"Signs of economic weakness are rearing their ugly head in many places and we're seeing an appropriate response in commodity and equity markets," president Michael Lynch of Strategic Energy & Economic Research in Eastern Massachusetts told Bloomberg.
At 11:51 a.m. on Thursday, crude oil futures dropped 3.99 percent, a $4.40 reduction to $105.96 per barrel.
Dow Jones Newswires reports analysts attributed oil futures' plunge to traders steering away from risky trades like equities and other commodities in the aftermath of Operation Twist, the Fed program to spur the economy. They also said oil futures' slip in price is indicative of the stimulus plan being underwhelming.
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