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Oil plunges on Indian interest rate, British GDP

Oil&Gas Materials 26 January 2011 01:06
Crude oil price on Tuesday dropped for the sixth straight day on a surprise slip in Britain's fourth-quarter economic growth and India's decision to raise interest rates, which caused concerns about worldwide economic recovery and oil demand.
Oil plunges on Indian interest rate, British GDP

Crude oil price on Tuesday dropped for the sixth straight day on a surprise slip in Britain's fourth-quarter economic growth and India's decision to raise interest rates, which caused concerns about worldwide economic recovery and oil demand.

New York crude benchmark broke the important support level of 87 dollars a barrel, Xinhua reported.

The Reserve Bank of India raised its benchmark interest rate by 0.25 percentage points on Tuesday, for the seventh time since the beginning of 2010, to help cool soaring prices.

And Britain's economy suffered a 0.5-percent contraction in fourth-quarter 2010 after December's heavy snow took a harsher toll than economists had forecast.

As a result, oil demand expectations were struck. Meanwhile, the U.S. crude oil stocks were expected to increase for the second consecutive week.

Light, sweet crude for March delivery dropped 1.68 dollars to 86.19 a barrel on the New York Mercantile Exchange.

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