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Brent crude sank below $100 a barrel in the Asian trade today, following its New York counterpart lower as markets reeled from the US credit rating downgrade by Standard & Poor’s.
Brent North Sea crude for September delivery slipped $4.11 or 3.96 per cent to $99.63, its lowest level since February 8, 2011.
New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in September, shed $4.72 or 5.8 per cent to $76.59 per barrel, a level it had not reached since September 29, 2010.
WTI prices had plunged $5.60 or 6.89 per cent to a low of $75.71 in intra-day trade before clawing back some ground.
Crude prices went into freefall after the unprecedented downgrade on Friday of the US’ long-term sovereign credit rating from AAA to AA+, Barclays Capital said in a report.
The downgrade also came on the heels of economic data from the US — the world’s largest crude consumer — showing weak jobs creation and service sector growth numbers in July, which did nothing to reassure spooked traders, the report added.
“Crude oil prices fell sharply in the aftermath of the S&P downgrade, and we expect continued pressure on prices until the flurry of negative economic data subsides,” it stated.
Sinking global equity markets and higher inflation in China — the world’s largest energy consumer — were also dragging down prices, said Ms Shailaja Nair, Asian managing editor at energy information provider Platts.
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