Oil to drop under $100 per barrel

The Oct NYMEX crude oil contract closed lower at $102.58 off the low of the day at $101.36. It remains soft at $102.18 at 12:10 pm GMYT, despite Hurricane Ike being upgraded to Category 2 and a drop in US oil inventories yesterday. Normally such news would feed a rise, so bigger factors than the immediate news are fuelling the price move.

Everyone is awaiting a drop under the round-number $100, already achieved in the European benchmark price, Brent crude oil, which hit $98.72 at 11:44 am GMT. Barclay’s told Bloomberg that it thinks Saudi Arabia would be content with oil at $90-100 and it lowered its forecasts for year-end according. Japan: The Nikkei fell 244.13 points, or 1.98%, to 12,102.50, the lowest level since March 18, when it closed at 11,964.16.

The cause is ongoing fear of a crash in the US financial sector stocks because of Lehman.