Oil prices have plunged more than 9 percent over the past 10 days, and experts think there’s more of that to come amid sagging demand and ample supply.
Crude for November delivery dropped $1.39, or 1.5 percent, Wednesday to $89.98 a barrel on the New York Mercantile Exchange. That’s the lowest settlement since Aug. 2.
News that U.S. demand for distillates, which include diesel fuel and heating oil, fell 8.7 percent in the latest week helped fuel the move Monday. Distillate demand dropped 10 percent last week.
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“Now we’re going to have to really watch it,” John Kilduff of Again Capital told CNBC. “If we get another two reports like this, and it’s a full-month reporting period, then it’s clear we have a problem.”
The next leg down for crude could take it to $82, he said.
Stagnant global economic growth also is weighing on the commodity, market participants say.
“The demand numbers played into the weaker economic outlook,” Jacob Correll, an analyst at Summit Energy, which manages more than $20 billion in companies’ annual energy spending, told Bloomberg. “Stocks are lower, and there is the weaker economic sentiment that’s pushing crude down.”
Renewed concern about Europe’s debt crisis is hurting oil too. "It is 'risk off' today," Olivier Jakob, an energy analyst at Petromatrix in Zug, Switzerland, told Reuters. "The Greek strike and Spanish demonstrations are getting a lot of coverage."
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