Oil had its worst reaction to an OPEC meeting in more than four years, with prices sliding just after the cartel agreed to prolong production curbs as fears about the global economy mount.
Futures closed down 4.8% in New York, the steepest decline since May 31 and the biggest drop after an OPEC gathering since November 2014. Bank of England Governor Mark Carney warned of dangers from rising protectionism around the globe, citing a “widespread slowdown” that may require a major policy response. That added to worries following weak manufacturing reports from the U.S., China and Europe.
The anxieties blotted out optimism despite Tuesday’s agreement by major oil exporters to extend production cuts for nine months. Divisions remained over Saudi Arabia’s push to target even deeper reductions, with Russia expressing doubts at the end of a summit in Vienna.
West Texas Intermediate crude for August delivery slipped $2.84 to settle at $56.25 a barrel on the New York Mercantile Exchange. The slide accelerated as the contract crashed through several key technical trading levels, with WTI crossing below its 50-, 100- and 200-day moving averages.
Brent for September settlement declined $2.66 to $62.40 a barrel on the ICE Futures Europe Exchange.
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