Oil prices dived into a 17-month trough on Thursday, as fears over a slack market stuck in oversupply and weaker demand intensified after the stock market took a harsh beating.
Both WTI and Brent futures have erased over 35 percent gains from their October highs, weighed by a steep sell-off in the stock market as investors continued reacting to Fed's fourth interest rates this year.
Higher borrowing costs by a quarter point fanned concerns over sagging economic growth. Plus, worries of a possible U.S. government shutdown also deteriorated losses in equities on Thursday afternoon, with the Dow Jones Industrial Average tumbling roughly 500 points and Nasdaq closing near a bear market.
U.S. President Donald Trump told House Republican leaders in an emergency meeting that he would not sign an interim funding bill to keep the government in operation and would continue to demand money for a wall along the U.S.-Mexico border, House Speaker Paul D. Ryan said at a news conference after the meeting.
Yet Fed's slower path to further rate hikes in 2019, which signaled it's approaching an end of a tightening cycle, has provided little support for investors' expectations.
Shrinking U.S. crude stockpiles and a daily 1.2 million-barrel output cut deal reached by OPEC and its allies have played a limited role in reversing falling price, as it takes time for investors to observe how the supply and demand sides will develop.
The West Texas Intermediate for January delivery fell 1.32 U.S. dollar to settle at 45.88 dollars a barrel on the New York Mercantile Exchange, while Brent crude for February delivery tumbled 2.89 dollar to close at 54.35 dollars a barrel on the London ICE Futures Exchange.
Editor:Yaling
