WTI oil price heads for biggest monthly loss since 2008 as dollar and demand hit crude

The price of US WTI crude oil futures is set for it’s biggest monthly loss since December of 2008 as recent strength in the US dollar, together with oil demand concerns as a double dip recession hits Europe send the price of oil plummeting.

Latest WTI Oil Price

US Light crude oil futures for July 2012 delivery was trading at $87.98 a barrel, 11.52 GMT today in trading on the NYMEX. On Wednesday, WTI oil futures fell $2.99, or 3.3 percent, to $87.78 as global stock markets also sank.

US WTI oil has dropped more than 16 percent so far in May, erasing all of its gains for 2012.

US Dollar Strength

The dollar is hanging onto recent gains that saw the US Dollar Index pass through 83 in trading on Wednesday as analysts and investors mull over the latest news surrounding Europe’s debt crisis in multiple euro zone countries.

Europe Double Dip

Experts are concerned about a banking crisis in Europe that may pull countries that use the euro common currency into a double dip recession. Concerns mounted Wednesday, when the European Commission reported that economic confidence has plummeted this month to the lowest level in 2.5 years.

Victor Shum, energy analyst at consultancy Purvin & Gertz in Singapore, said European troubles and weak demand were responsible for sliding oil prices.

“OPEC has been producing at record levels and North American crude production continues to boom so inventories are high.” Shum said.

“The weak macroeconomic news out of Europe and fears about all these debt troubles spreading to Spain and Italy, coupled with weak fundamentals, have caused the Nymex to break through $90 and we’re still heading down today in Asia.”

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WTI oil price heads for biggest monthly loss since 2008 as dollar and demand hit crude