JOHANNESBURG - Crude slid to the lowest in seven weeks as economic turbulence in Turkey and the strengthening greenback heightened concerns about global oil demand. Futures fell as much as 2.5percent in New York yesterday as the dollar rose, diminishing the buying power of developing economies.
In Turkey, an economy that’s larger than the Netherlands or Taiwan, bonds and stocks dropped along with the currency as investor confidence plunged. Meanwhile, Opec raised production in July, with increases in output from Kuwait, Nigeria and the United Arab Emirates.
“It’s a strong dollar situation. That reverse correlation is putting pressure on the barrel for starters,” said Bob Yawger, director of futures division at Mizuho Securities.
The US benchmark crude has declined more than 4percent this month as international trade disputes threatened to deflate energy demand growth. Turkey’s central bank pledged to “take all necessary measures” to bolster the financial system, lowering the amount commercial lenders must park at the regulator and easing rules governing lira and foreign-currency liquidity.
West Texas Intermediate crude for September delivery slid $1.53 to $66.10 (R928.95) a barrel at 12.12pm on the New York Mercantile Exchange. Total volume traded was about 30percent below the 100-day average.