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LONDON: Oil prices plunged below 93 US dollars Monday, hitting seven-month lows on prospects of weaker energy demand amid a worsening global financial crisis after Lehman Brothers' bankruptcy, analysts said.
Brent North Sea crude for delivery in October tumbled to 92.84 US dollars a barrel -- the lowest level since February. It later recovered slightly to stand at 93.42 US dollars, a drop of 4.16 US dollars.
New York's main contract, light sweet crude for October delivery, dived 4.40 US dollars to 96.78 US dollars a barrel.
"Oil futures were down ... as turmoil in the financial markets hurt sentiment and reinforced concerns about weaker oil demand growth," said Sucden analyst Michael Davies in London.
Oil prices were also weighed down by news that damage to US oil platforms caused by Hurricane Ike had not been as bad as feared, analysts said.
US officials said that Ike, which slammed the US Gulf Coast on Saturday, had damaged about 10 oil platforms in the Gulf of Mexico where major energy installations are located.
"The initial perception is that there hasn't been much structural damage to oil and refinery infrastructure," said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.
Crude prices are down by more than a third in value from record levels of above 147 US dollars reached in July, as investors grow increasingly pessimistic about weakening energy demand amid signs the global economy is slowing down.
Fuelling investors' concerns was the announcement Monday that Lehman Brothers would file for bankruptcy after the investment bank, in desperate need of capital injection, failed to find a buyer.
Global stock markets plunged between three and seven per cent Monday on concerns over the beleaguered world economy. The European Central Bank and Bank of England responded to the latest gloom by pumping billions of dollars into world financial markets.
- AFP/ir
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