Oil prices fell 10 percent on Friday, ending below US$80 a barrel the first time in a year, and gold reversed an early rally as investors sold every asset they could to raise cash amid growing fears of a global recession.
Gold futures, a safe haven for many in recent weeks, ended down 3 percent, after rising almost 6 percent overnight.
US crude oil settled down US$8.89 at US$77.70 a barrel, after plummeting 10 percent to US$77.09, the lowest level since Sept. 11 last year. London Brent crude settled down US$8.57 at US$74.09 a barrel.
Crude oil for November delivery fell US$16.18, or 17 percent, to US$77.70 a barrel this week on the New York Mercantile Exchange, the lowest settlement price since Sept. 10 last year. Prices, which are down 4.4 percent from a year ago, have dropped 47 percent from the record US$147.27 a barrel reached on July 11.
Oil and other energy markets tumbled after the International Energy Agency slashed its estimate of worldwide oil demand growth for this year to its lowest rate since 1993. It also lowered its growth forecast for next year by 190,000 barrels per day.
Just three months ago, US crude stood above US$147 a barrel as a six-year rally in commodities peaked.
Crude prices may fall further next week on concern that fuel consumption will drop as the credit crisis slows global economic growth.
Thirteen of 30 analysts surveyed by Bloomberg News, or 43 percent, said prices will decrease through Friday. Nine respondents, or 30 percent, said oil will rise and eight said prices will be little changed. Last week 55 percent expected futures to decline.
“The economic outlook is the primary mover of the market at the moment,” said Phil Flynn, senior trader at Alaron Trading Corp in Chicago.
The oil survey, conducted each Thursday, has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.
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