Home

Chinese central bank jars oil prices

Tue, 19/10/2010 - 21:54 by harsheeb

New York -- Crude oil prices dropped sharply Tuesday morning to under $82 per barrel after the People's Bank of China raised interest rates to slow its economy.

The bank said it would raise the one-year yuan interest rate to 5.56 percent from 5.31 percent, lifting the rate for the first time in nearly three years, The Wall Street Journal reported.

"The move obviously aims to curb high property prices and inflation," said UBS Securities economist Wang Tao.

"The rate hike is necessary although the possibility for such a move seemingly became modest recently," she said.

On the New York Mercantile Exchange, light, sweet December delivery crude oil lost $2.35 overnight to $81.45 per barrel. Home heating oil prices shed 5.37 cents to $2.2224 per gallon. Reformulated gasoline prices dropped 6.89 cents to $2.0826 per gallon.

Natural gas prices held up, adding 5 cents to $3.481 per million British thermal units.

At the pump, the national average price for unleaded gasoline dropped from Monday's $2.832 per gallon to $2.829, AAA said.

Copyright 2010 United Press International

No votes yet