Oil prices plunge by $ 4.53 on credit crisis

Commodity Online

NEW YORK: In its biggest daily loss since 1991, world oil prices lose 4.53 dollars a barrel on Monday, after hitting a record high of 111.80 dollars a barrel.

Analysts said fresh concerns about the credit crisis and the U.S. economy as the main reason for the crumbling.

Crude oil for April delivery tumbled 6.98 dollars to an intraday low of 103.23 dollars a barrel in mid afternoon trading. It closed at 105.68 dollars a barrel on the New York Mercantile Exchange, down 4.1 percent, or 4.53 dollars, the biggest decline since early 1991.

Crude earlier rose and almost hit 112 dollars as the dollar fell to a new low against the euro.

Oil prices seesawed wildly Monday as bearish investors fled for the exits after a surprise Fed decision to aid Wall Street banks over the weekend.

The swings also came as the Federal Reserve made an inter meeting cut in the discount rate over the weekend and as worries on the credit crisis were intensified after J.P. Morgan Chase Co. said it was buying Bear Stearns for 2 dollars a share.