SIOUX FALLS, S.D. — Oil prices plummeted more than 10 percent Monday with little to suggest energy demand will recover in the deteriorating global economy.
Benchmark crude for April delivery fell $4.61 to settle at $40.15 a barrel on the New York Mercantile Exchange. In London, the price for Brent crude fell nearly 9 percent, or $4.14, to settle at $42.21 on the ICE Futures exchange.
Oil dipped below $40 per barrel for the first time since a three-day rally last week. Prices began to fall Friday, and the sell-off continued Monday.
Michael Lynch, president of Strategic Energy & Economic Research, said the relentless influx of grim headlines is keeping downward pressure on the market.
“We had the run-up last week, but now people are looking at weaker demand signals, and that’s making them think we’re going to need another round of cuts from OPEC,” Lynch said.
The Organization of the Petroleum Exporting Countries has already slashed more than 4 million barrels from daily production, according to most estimates.
Pessimism in the energy markets grows stronger every time the government must step in to prop up a major U.S. corporation, and the market is getting more of the same this week.
The Commerce Department said Friday that gross domestic product contracted 6.2 percent in the fourth quarter, the worst showing in a quarter-century.
And Monday, the Institute for Supply Management said the nation’s manufacturing sector contracted for the 13th straight month in February.
