Oil prices slide on demand fears
Oil prices sank on Monday amid persistent worries about long-term global energy demand, as traders feared that the tentative US bailout deal would fail to boost slowing global economic growth.
New York's main contract, light sweet crude for November delivery, tumbled 3.29 dollars to 100.25 dollars per barrel.
London's Brent North Sea crude for November shed 3.39 dollars to 103.50 dollars, after earlier dipping as low as 99.51.
"Oil prices were over three dollars lower amid heightened concerns over demand destruction, as market participants fear the US government's 700-billion-dollar billion financial rescue plan will fail to revive wider economic problems caused by the credit crunch," said Sucden analyst Nimit Khamar.
Demand destruction is a process whereby high oil prices gradually erode global energy demand over the long term -- and result in lower price levels, according to oil industry experts.
Crude prices have dropped sharply from record high levels above 147 dollars in July as demand for energy shrank due to a US-led world economic slowdown.
"Nervousness over the future of financial markets beyond the US was heightened following the nationalisation of British mortgage lender Bradford & Bingley and Belgian-Dutch group Fortis," added Khamar.
"This, combined with the deteriorating outlook for European economies, has further fuelled concerns over the energy demand outlook."
Global stock markets tumbled Monday as US Congress was to vote on a multi-billion-dollar bailout deal for debt-stricken Wall Street banks.
Victor Shum, an analyst with energy consultancy Purvin and Gertz, said the deal would offer only short-term relief for investors worried about the impact of the financial crisis on energy demand in the world's biggest oil user.
"It looks like it has got agreement from both the Democrats and the Republicans," said Shum.
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