World crude prices tumbled below $60 a barrel today, dampened by slowdowns in US economic growth and Chinese demand for energy.
Prices retreated after rising earlier in the day owing to the threat of terrorist attacks on installations in Saudi Arabia, which is the world's biggest producer of crude oil.
New York's main contract, light sweet crude for delivery in December, dived $1.85 to $58.90 a barrel in pit trading. In London, Brent North Sea crude for December delivery plunged $1.08 to $59 a barrel in electronic deals.
Analysts said that the weaker US GDP figure will cast a shadow on most commodity complexes this week, contributing to a largely weaker tone and helping cap substantial price rallies.
The US economy grew at its slowest pace in more than three years in the third quarter. The US Commerce Department said on Friday that the economy expanded at an annual rate of 1.6% between July and September, down from 2.6% in the prior three months and a heady 5.6% in the first quarter.
Crude futures were also hit today by news that the rate of Chinese oil demand growth slowed down in September. Prices could face further drops owing to an expected rebound in stockpiles of US crude heading into the northern hemisphere winter.
Crude futures had risen in earlier Asian trade after the news from Saudi Arabia. Oil installations in Saudi Arabia are a 'high-probability potential target' for terrorist attack but tight security measures are in place to protect them, the Saudi interior ministry had said on Friday.
Saudi Arabia, the leading member of the Organisation of the Petroleum Exporting Countries, pumps more than nine million barrels of oil a day and sits on a quarter of global oil reserves. The kingdom operates the world's largest oil terminal at Ras Tannura.
Meanwhile, Kuwait's Energy Minister Sheikh Ali Jarrah al-Sabah said today that he believed oil prices have stabilised after a decision by OPEC to slash output by 1.2 million barrels a day from November 1.
OPEC's planned cut will reduce the cartel's actual production to 26.3 million bpd from 27.5 million bpd currently, which is below its official quota of 28 million bpd, in place since July 2005.
