Oil Falls for the First Time in Four Days as Recession Deepens
Crude oil fell for the first time in four days on concern energy demand will decline, after the U.S. economy contracted faster than anticipated.
Oil dropped after the government said gross domestic product shrank at an annual pace of 6.2 percent in the fourth quarter, the most since 1982. Prices also retreated as the dollar strengthened, reducing the appeal of commodities as an alternative investment.
“The GDP numbers are terrible and that’s putting pressure on the oil market,” said Michael Fitzpatrick, a vice president for energy at MF Global Ltd. in New York. “Demand has cratered, and after these numbers we can expect it to sink further. The dollar is up, taking additional froth out of the market.”
Crude oil for April delivery fell 46 cents, or 1 percent, to settle at $44.76 a barrel at 2:50 p.m. on the New York Mercantile Exchange. Prices are up 7.4 percent this month and 0.4 percent so far this year. Futures have dropped 70 percent from the record $147.27 a barrel reached on July 11.
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