OAKHURST, N.J. (DTN) -- New York Mercantile Exchange oil futures nearest to delivery and the front month Brent crude contract on the Intercontinental Exchange tumbled Wednesday afternoon, with a plunge in stock indices on concerns of an economic slowdown generating long liquidation in oil futures on the impact a decline would have on oil demand.
The International Monetary Fund earlier today said the "balance of risk in the economy" has "shifted to the downside," growth has plateaued globally and trade tensions escalated since its report six months ago.
"Looking ahead, financial stability risks could rise in the near-term. Several potential developments could trigger a sharp tightening in financial conditions," said Andreas Adriano, senior communications officer, communications department.
Just after 3:15 PM ET, the Dow Jones Industrial Average slid 2.4%, while the NASDAQ tumbled 3.1%.
Hurricane Michael made landfall around 12:30 PM near Mexico Beach, Florida, as a Category 4 storm with winds of 155 miles per hour. Just over 42% of Gulf of Mexico oil production was shut-in ahead of the storm with the National Hurricane Center sticking to its forecast for a Florida Panhandle landfall.
Though benchmark crude oil futures tumbled over 2.5% on the session, prices held above support levels amid continued uncertainty regarding lost Iranian export volumes as a result of U.S. sanctions, and to what extent producers can offset those barrels.
NYMEX November West Texas Intermediate crude oil futures tumbled $1.79 to settle at $73.17 bbl, while the December ICE Brent crude contract toppled $1.91 to $83.09 bbl settlement.
November ULSD futures dropped 2.89cts to $2.3949 gallon as the downside remains limited by lost diesel production at Irving Oil's Saint John refinery earlier this week. NYMEX November RBOB futures plunged 5.7cts to $2.0204 gallon at Wednesday's formal session close.
Brian L. Milne can be reached at email@example.com
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