US oil breaks 90-dollar level on European crisis

The U.S. crude oil price dropped sharply on Wednesday and broke the important supporting level of 90 dollars a barrel, as protests in Spain and Greece added to concerns about the eurozone debt crisis. Protests against the government's austerity measures erupted in Athens on Wednesday and turned violent. Similar protests occurred earlier in Madrid. The situation fueled uncertainties about the two countries' ability to resolve their serious debt problems. Meanwhile, the Bank of Spain said that the Spanish economy slowed "at a significant rate" in the third quarter. Spain's 10-year bond yield topped 6 percent on Wednesday for the first time in the week, and the euro fell to a two-week low against the dollar amid rising concerns. A strengthening greenback also weighed on the dollar-denominated commodities. Besides, investors remained concerned about the global economic prospects after a series of weak signs. The Energy Information Administration said that U.S. crude inventories dropped by 2.4 million barrels in the week ended Sept. 21. The decrease came in as oil imports fell sharply in the week, overshadowing a moderate rise in domestic production. Even with this decline, U.S. commercial oil inventories still stood at 365.2 million barrels -- extremely heavy and above the historical upper limit. However, escalating tensions over Iran's controversial nuclear program helped limit the losses in crude prices. Light, sweet crude for November delivery lost 1.39 dollars, or 1.52 percent, to settle at 89.98 dollars a barrel on the New York Mercantile Exchange, after dipping to the lowest intraday level of 88.95 dollars a barrel. This is the first time for U.S. crude to settle under 90 dollars since Aug. 3. In London, Brent crude for November delivery fell 41 cents, or 0.37 percent, to close at 110.04 dollars a barrel.