Oil down in Asia on US stimulus doubts
AFP – Crude fell in Asia on Wednesday as doubts over the efficacy of fresh US economic stimulus surfaced following comments from a top Federal Reserve official, analysts said.
New York’s main contract, light sweet crude for delivery in November sank 33 cents to $91.04 a barrel and Brent North sea crude for November delivery shed 49 cents to $109.96 in morning trade.
Doubts expressed Tuesday by Charles Plosser, head of the Fed’s Philadelphia branch, over the economic impact of the QE3 bond-buying program announced earlier this month dragged markets down, analysts said.
“A high-profile figure in the form of… Plosser questioned the effect QE3 would have, particularly on labour markets,” IG Markets said in a report.
“Many traders feel central bank stimulus is merely a sticking plaster for a broken leg, and that much more needs to be done to send the global economy safely on the road to recovery.”
Plosser’s comments also triggered a large selloff in the US stock markets late Tuesday, with the Nasdaq, Dow Jones Industrial Average and S & P 500 tanking after his speech.