Crude oil fell, retreating from its largest gain in seven weeks, as global stock markets declined on concern the recession is deepening. Oil lost as much as 6.5 percent as the Dow Jones Industrial Average tumbled below its lowest close since 1997. Crude jumped 14 percent yesterday after a report showed an unexpected decrease in U.S. inventories last week. The March crude oil contract expired at the close of floor trading today.
Crude oil for March delivery dropped 20 cents, or 0.5 percent, to $39.28 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Crude oil rose for the first week in the past four. Prices are down 12 percent this year. Yesterday, futures gained 14 percent to settle at $39.48 a barrel. The more-active April contract fell 14 cents, or 0.4 percent, to $40.04 a barrel.
“The gloom that cloaks the rest of the globe’s financial markets could not be ignored for long and is dragging down oil prices again this morning,” Michael Fitzpatrick, vice president for energy at MF Global Ltd. in New York, said in a report.