Oil plunges after striking 4-month highs
Wednesday, 25 March 2009
LONDON, Mar 24 (AFP): Oil prices slid Tuesday on profit-taking after hitting four-month peaks on news of the United States (US) government's massive plan to clear toxic assets from bank balance sheets.
New York's main futures contract, light sweet crude for delivery in May, gave up 75 cents to 53.05 dollars per barrel.
London's Brent North Sea crude for May delivery retreated 60 cents to 52.87 dollars a barrel.
On Monday, crude futures had hit the highest levels since late 2008, mirroring a world stock market rally, after the announcement of a US government plan to rid ailing banks of their troubled assets.
New York crude had surged to 54.05 dollars and London Brent jumped as high as 53.85 dollars -- levels last seen in November.
"Crude extended gains (on Monday) as it joined the rally in equities following the announcement by the US Treasury of its plan to stimulate private investors to take bad assets off the banks," said NCB analyst Peter Hutton.
The US Treasury unveiled a long-awaited plan Monday to buy up toxic assets clogging the financial system using government funds, loans to investors and guarantees intended to attract private capital.
World stock markets continued to rally on Tuesday, but London ran into profit-taking, as investors absorbed Washington's toxic assets plan.
Asia powered higher, mirroring huge gains overnight on Wall Street, as investors applauded US Treasury Secretary Timothy Geithner's bid to soak up bad debts and kick-start the recession-hit US economy.
New York's main futures contract, light sweet crude for delivery in May, gave up 75 cents to 53.05 dollars per barrel.
London's Brent North Sea crude for May delivery retreated 60 cents to 52.87 dollars a barrel.
On Monday, crude futures had hit the highest levels since late 2008, mirroring a world stock market rally, after the announcement of a US government plan to rid ailing banks of their troubled assets.
New York crude had surged to 54.05 dollars and London Brent jumped as high as 53.85 dollars -- levels last seen in November.
"Crude extended gains (on Monday) as it joined the rally in equities following the announcement by the US Treasury of its plan to stimulate private investors to take bad assets off the banks," said NCB analyst Peter Hutton.
The US Treasury unveiled a long-awaited plan Monday to buy up toxic assets clogging the financial system using government funds, loans to investors and guarantees intended to attract private capital.
World stock markets continued to rally on Tuesday, but London ran into profit-taking, as investors absorbed Washington's toxic assets plan.
Asia powered higher, mirroring huge gains overnight on Wall Street, as investors applauded US Treasury Secretary Timothy Geithner's bid to soak up bad debts and kick-start the recession-hit US economy.