Crude Oil Plummets To End Below $89 A Barrel

(RTTNews) - U.S. crude oil plunged to end sharply lower on Tuesday, ahead of the official weekly oil inventory reports with demand growth concerns after the International Monetary Fund slashed its global growth forecast for the year.

The International Monetary Fund on Tuesday slashed its growth projections for the world economy, with recovery remaining weak and uneven amid rising financial and geopolitical risks.

The American Petroleum Institute is scheduled to release its oil status report for the week ended October 3, while the U.S. Energy Information Administration will release its weekly oil inventory data on Wednesday.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, plunged $1.49 or 1.6 percent to close at $88.85 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for November delivery scaled a high of $90.57 a barrel intraday and a low of $88.79.

On Monday, crude oil rebounded to end higher after having plummeted to a two-year low last week. Oil prices moved higher as the dollar came off its 4-year highs against a basket of major currencies, amid demand growth concerns with lingering worries of a slow down in China.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.70 on Tuesday, down from its previous close of 85.78 late Monday in North American trade. The dollar scaled a high of 86.10 intraday and a low of 85.65.

The euro trended higher against the dollar at $1.2657 on Tuesday, as compared to its previous close of $1.2655 late Monday in North American trade. The euro scaled a high of $1.2664 intraday and a low of $1.2584.

Washington-based International Monetary Fund in its World Economic Outlook slashed global growth projection for this year to 3.3 percent from 3.4 percent predicted in July. The forecast for 2015 was lowered to 3.8 percent from the 4 percent forecast earlier.

From Europe, German industrial production declined at the fastest pace since January 2009, falling 4 percent month-on-month in August, underlining that the largest euro area economy is moving further down after contracting in the second quarter.

The British economy revealed a steady pace of expansion in the three months to September, with possibilities the central bank may hike interest rates in the first quarter of 2015, the National Institute of Economic and Social Research said Tuesday. Economic output increased 0.7 percent in the three months ending September after growing 0.8 percent in the three months to August. This indicates the U.K. economy is now 3.1 percent larger than it was in the same period in 2013.

In the second quarter, the U.K. economy grew 0.9 percent sequentially and 3.2 percent annually, according to the Office for National Statistics.

Meanwhile, industrial production in U.K. remained unchanged in August as maintenance at North Sea dampened oil and gas extraction. Industrial output remained flat in August from July, when it rose 0.4 percent, the Office for National Statistics reported Tuesday.