The price of crude oil dropped to near $87 a barrel Wednesday amid concerns over the outlook for global economic growth.
By early afternoon in Europe, benchmark oil for May delivery was down $1.51 to $87.21 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 1 cent on Tuesday.
Crude has fallen sharply over the past week, part of a broad sell-off in commodities that included gold recording its biggest one-day drop in 30 years, due mainly to lower-than-expected growth in China during the first quarter of the year.
On Tuesday, the International Monetary Fund lowered its outlook for world economic growth this year to 3.3 percent from its forecast in January of 3.5 percent. It expects U.S. economic growth of 1.9 percent this year, down from its January estimate of 2.1 percent, while the combined economy of the 17 euro countries is seen shrinking 0.3 percent in 2013.
“It seems that the oil market is tracking losses in the European equity markets as market sentiment remains fairly bearish,” said analysts at Sucden Financial Research in London. Stock markets in London, Frankfurt and Paris were down between 0.7 percent and 1.7 percent on Wednesday.
Investors are also awaiting fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending April 12 is expected to show a build of 1.25 million barrels in crude oil stocks and a draw of 1.1 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The report from the Energy Department’s Energy Information Administration — the market benchmark — will be released later Wednesday.
Brent crude, which is used to price oil used by many U.S. refiners to make gasoline, was down $1.10 to $98.81 a barrel on the ICE Futures exchange in London.
Analysts predicted Brent was unlikely to remain below $100 for long.
“This price level is well supported because OPEC regards it as ‘appropriate’ and is likely to defend it by cutting production if the price should fall below it for any length of time,” said a report from Commerzbank in Frankfurt.
In other futures trading on the Nymex:
— Wholesale gasoline fell 3.03 cents to $2.7438 a gallon.
— Heating oil lost 3.38 cents to $2.7727 a gallon.
— Natural gas rose 6.5 cents to $4.225 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.