US crude plunges on stock market meltdown

HOUSTON (ICIS)–NYMEX crude futures for October delivery fell to the lowest level since 2009, settling at $38.24/bbl, down $2.21, driven by a sell-off in global equities and commodities responding to concerns over China’s economy.

The dollar fell against a basket of currencies on sentiment that the US Federal Reserve will delay raising interest rates. A weak dollar normally makes dollar-denominated commodities cheaper but failed to provide underlying support to oil prices.

Adding to the market’s volatility, noises that Iran plans to raise oil output in order to regain market share after sanctions are lifted pressured the energy complex.

With the market in search of a bottom, West Texas Intermediate (WTI), the US benchmark, established an intra-day low of $37.75/bbl, down $2.70, before attempting to rebound.

The feeding frenzy drove October ICE Brent to the lowest level of the year, hitting $42.51/bbl before rebounding to settle at $42.69/bbl, down $2.77, but showing signs of working lower.