Oil Settles Below $51 as US Economy Shrinks
Oil tumbled by more than 6 percent Tuesday to settle below $51 a barrel after data showed the U.S. economy in the third quarter shrank at its fastest pace in seven years, stoking concerns fuel demand will slow further.
The U.S. Commerce Department revised the annual rate of decline in third-quarter gross domestic product to 0.5 percent from the 0.3 percent reported last month. It was the sharpest fall since the third quarter of 2001.
U.S. light, sweet crude fell $3.75, or 6.88 percent, to settle at $50.75 a barrel.
London Brent crude also traded lower.
“The focus in the oil markets is again on softening demand in the wake of a weak GDP,” said Phil Flynn, analyst at Alaron Trading.
U.S. stocks extended losses, sending the Nasdaq down more than 2 percent, as investors pummeled technology shares on concerns about the deepening economic downturn.