Oil prices slump on US stock market crash, Asia follows

7 May 2010 7 May 2010

BonTrade

Oil prices slumped lower in a heavy trading session on Thursday as the US stock market tumbled and on Friday, Asian markets and European markets are set to follow suit.

US Light crude oil futures for delivery in June, closed down $2.86 to $77.11 a barrel on the NYMEX, while in London, Brent crude oil futures for June delivery fell $2.78 to $79.83 on the ICE Futures Exchange.

The plunge in the Dow Jones Industrial Average, took the index down by the largest number of points in its history and stoked panic across fragile financial markets. At 2.20pm, the Dow stood at 10,460, already down 400 points, but then it tumbled 600 points in seven minutes to its low of the day of 9,869, a drop of 9.2 per cent.

Price declines had been getting worse throughout the day, even before trading went haywire. Investors were digesting more news from Greece and a warning from credit-rating agency Moody’s that the bond market could now turn against government debt in other eurozone countries and the UK.