Oil plummets as central banks cut interest rates

Bloomberg

Oil plunged, re-entering bear-market territory, as central banks cut interest rates around the world, feeding into an increasingly dismal economic view.
Futures in New York fell as much as 4.2% on Wednesday to the lowest in almost two months. Crude was swept up in a global meltdown of stock and commodity markets after rate cuts in New Zealand, India and Thailand escalated recessions fears and spurred a flight to safe havens such as US Treasuries and gold.
London-traded Brent crude deepened its descent into bear territory, dipping almost 4%.
“The bearish and deteriorating global macro situation seems to have the upper hand, pushing oil lower and lower,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB.
Amid worries about the escalating US-China trade war, oil fell despite an industry report showing American crude stockpiles are still shrinking. The US government’s Energy Information Administration lowered its estimates for growth in global oil demand in 2019 to 1 million barrels a day.
Brent crude has fallen around 10% this month as the deteriorating relationship between the world’s two largest economies damped the global growth outlook, eclipsing the threat of supply disruptions in the Persian Gulf. The ratcheting up of trade tensions in the past week spurred speculation that China will start avoiding American oil.
West Texas Intermediate oil for September delivery declined $1.43 to $52.20 a barrel at 10:23 a.m. on the New York Mercantile Exchange after earlier reaching $51.39.
Brent for October settlement fell $1.35 to $57.59 on the London-based ICE Futures Europe Exchange. The contract sold for a premium of $5.41 to WTI for the same month.