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Goldman charges hit price of oil | Goldman charges hit price of oil |
(about 18 hours later) | |
The oil price has dropped sharply for a second day as fraud charges filed in the US against Goldman Sachs bank on Friday shook investor confidence. | The oil price has dropped sharply for a second day as fraud charges filed in the US against Goldman Sachs bank on Friday shook investor confidence. |
US light crude oil fell by $1.79 to settle at $81.45 a barrel. London Brent oil lost $1.76 to $84.23 | US light crude oil fell by $1.79 to settle at $81.45 a barrel. London Brent oil lost $1.76 to $84.23 |
The price of oil has now fallen by about $4 a barrel since Thursday. | The price of oil has now fallen by about $4 a barrel since Thursday. |
Concerns about reduced fuel consumption by planes due to disruption caused by ash from the Icelandic volcano have also hit prices. | |
Planes across Northern Europe Europe were prevented from flying for a fifth day on Monday, though some services were set to resume on Tuesday. | Planes across Northern Europe Europe were prevented from flying for a fifth day on Monday, though some services were set to resume on Tuesday. |
"It is hard to calculate the total effect of the volcano-related shut down of air traffic, but the net effect is probably in the region of 0.5-1 million barrels a day less oil demand. This is a massive amount," said Torbjorn Kjus at DnB NOR Markets. | "It is hard to calculate the total effect of the volcano-related shut down of air traffic, but the net effect is probably in the region of 0.5-1 million barrels a day less oil demand. This is a massive amount," said Torbjorn Kjus at DnB NOR Markets. |
There was also a general feeling that the oil price had been over-inflated in recent weeks, analysts said. | There was also a general feeling that the oil price had been over-inflated in recent weeks, analysts said. |
"Markets got ahead of themselves with oil prices above $85, which was fundamentally not justified, so there are plenty of reasons to be rather cautious down the road," said Carsten Fritsch at Commerzbank. | "Markets got ahead of themselves with oil prices above $85, which was fundamentally not justified, so there are plenty of reasons to be rather cautious down the road," said Carsten Fritsch at Commerzbank. |
The price of oil hit an 18-month high of more than $87 a barrel earlier this month. | The price of oil hit an 18-month high of more than $87 a barrel earlier this month. |
On Friday, US financial regulator the Securities and Exchange Commission (SEC) charged banking giant Goldman Sachs of defrauding investors. | On Friday, US financial regulator the Securities and Exchange Commission (SEC) charged banking giant Goldman Sachs of defrauding investors. |
The claims concern Goldman's marketing of certain mortgage investments just as the US housing market faltered. | The claims concern Goldman's marketing of certain mortgage investments just as the US housing market faltered. |
Goldman has rejected the SEC's allegations, saying that it would "vigorously" defend its reputation. | Goldman has rejected the SEC's allegations, saying that it would "vigorously" defend its reputation. |