New York oil price slides low

The price of New York oil sank on Wednesday to the lowest point in almost two months, pressured by eurozone debt crisis fears centred on Spain, and ahead of the latest US crude inventories report. The market was also hit after a US Federal Reserve official questioned the ability of the central bank's recent economic stimulus plan to boost the world's biggest crude-consuming nation, traders said. New York's main contract, light sweet crude for November, dived to $90.33 per barrel -- which was the lowest point since August 3. It later recovered slightly to stand at $90.61, down 76 cents from Tuesday's closing level. Brent North Sea crude for delivery in November retreated $1.15 to $109.30 a barrel in London midday deals. "The renewed escalation of the debt crisis in the eurozone, with violent protests in Spain against the planned new austerity measures, has sparked gloomier sentiment on the financial markets once again and is also putting oil prices under pressure," said Commerzbank analyst Carsten Fritsch. Spain's debt-plagued government was on Thursday due to adopt an austerity budget that could be a precursor to a full-blown bailout. Attention was later in the day due to switch to the US Department of Energy as it publishes its snapshot of crude oil inventories for the week ending September 21. Oil prices had ended mixed on Tuesday as traders mulled comments from a US central bank official who was critical of the Fed's third round of economic stimulus, or quantitative easing (QE3) that was announced earlier this month. Charles Plosser, head of the Fed's Philadelphia branch, said he was doubtful the QE3 bond-buying programme would have great impact on charging up the US economy, and warned that the Fed could lose credibility. "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," IG Markets trading group said in a report. Crude prices had won a brief boost on Tuesday from tough talk toward Iran from US President Barack Obama at the United Nations. Obama vowed that the United States would not permit Iran to arm itself with nuclear weapons. Major crude producer Iran is locked in a standoff with the West over a nuclear programme that the West alleges is designed to produce a bomb. The Islamic republic maintains that it is purely for civilian purposes. "Make no mistake. A nuclear-armed Iran is not a challenge that can be contained. It would threaten the elimination of Israel, the security of Gulf nations, and the stability of the global economy," Obama warned.