Oil tumbles to 21-month low of $58 a barrel

Oil prices on Thursday tumbled under 58 dollars a barrel, reaching the lowest level for nearly 21 months as recession fears gripped markets,World's top 10 oil producers
traders said.

On London's InterContinental Exchange (ICE), Brent North Sea crude for delivery in December dived more than four dollars to 57.46 dollars a barrel -- the lowest level since February 2007.

At about 1555 GMT, the contract recovered slightly to stand at 58.08 dollars, down 3.79 dollars compared with Wednesday's close.

On the New York Mercantile Exchange (NYMEX), light sweet crude for December fell dropped 3.80 dollars to 61.50 dollars a barrel.

Fears of a deep recession and hence weaker energy demand intensified on Thursday as European central banks slashed interest rates.

The Bank of England's monetary policy committee cut British borrowing costs by a record 1.50 percentage points to 3.0 percent -- the lowest level in more than half a century. The European Central Bank reduced eurozone borrowing costs by 0.50 percentage points.

"Market participants may be taking the view that for the MPC to slash rates in such a dramatic manner, things must be really bad," said David Evans, an analyst at BetOnMarkets.com.

Oil prices had already tumbled by more than five dollars Wednesday on NYMEX as US data showed demand falling in the world's biggest energy consuming nation, highlighting worries about a slowing global economy.

Source: EconomicTimes