Oil drops nearly 6 percent in commodities rout
NEW YORK (Reuters) - Oil plunged nearly 6 percent on Thursday, headed for the biggest four-day loss in a year, sparked by a sell-off across commodities markets on mounting worry about the economy, interest rates and demand.
Crude prices were headed for their biggest four-day drop since May 7, 2010. The wider commodity rout saw the Reuters-Jefferies CRB index <.CRB>, a global benchmark for the asset class, losing 3.7 percent, on track for its biggest one-day loss in two years.
Commodities have declined sharply as investors fear that new highs reached last month in oil, metals and grains were overdone and overdue for a correction, analysts said.
"Concerns about the impact of higher prices on the economy and demand for commodities are now feeding through...the market focus has now definitely shifted from geopolitical concerns to the demand side," said David Greely, head of energy research at Goldman Sachs in New York.
U.S. crude for June delivery fell to a session low of $112.55 a barrel, down $8.64, or 7.1 percent, the biggest one-day percentage loss since March 30, 2009. In four days, U.S. front-month crude has fallen more than 9 percent, the biggest percentage loss since May 7, 2010's 12 percent dive.