Crude Oil dropped on Monday below $89 a barrel as stock markets in Asia and Europe fell on concerns over a global economy slowdown.
The MSCI World Index which measures global stock prices fell 2.3 percent today. Although last week President George W. Bush launched a $145 billion economic stimulus plan to stave off a recession, world economies are still worried fuel demand could slump.
Crude oil for February delivery fell $1.93 or 2.13 percent to $88.64 a barrel at 12:37 p.m. EST in electronic trading on the New York Mercantile Exchange. Brent crude fell $1.70 or 1.90 percent to $87.70 a barrel at London's ICE Futures Exchange.
Oil's price has declined more than 10 percent since it reached $100.09 at the beginning of the year.
Asian Markets in Hong Kong and China fell more than 5 percent on Monday. The European stocks fell 2.2 percent earlier, its lowest level since August 2006.
Furthermore, Sam Bodman U.S. Energy Secretary asked Saudi Arabia for more oil at a meeting in Abu Dhabi this weekend. On Monday he repeated the petition saying I continue to believe in my earlier statement that we are hopeful they will increase supplies, according to Reuters.
The United Arab Emirates oil minister of the Organization of Petroleum Exportation Countries said to reporters today that OPEC has not decided if oil production will increase. The members of OPEC provide more than 40 percent of world's crude. They will meet on February 1 to determine oil output.
In Mexico, weather conditions interrupted oil transportation by ship to the U.S. yesterday morning. According to the Merchant Marines website, rain affected oil terminals and commercial shipping ports.
On Friday data from U.S. regulator, the Commodity Futures Trading Commission, revealed speculators such as hedge-funds have decreased net long positions, which are positions that anticipate a rise in prices.