Oil prices nosedived to a seven-month low today as the Gulf Coast energy infrastructure appeares to have escaped any major damage from Hurricane Ike and traders bet that Lehman Brothers' bankruptcy could ignite a massive liquidation of commodities, the AP reports.
Light, sweet crude for November delivery fell $4.87, or 4.82 percent, to $96.38 a barrel on the New York Mercantile Exchange, after earlier dropping to $94.41, the lowest level since Feb. 14. A close at that level would be oil's first settlement under $100 since March 4. In London, October Brent crude fell $5.47 to $92.11 a barrel on the ICE Futures exchange.
Crude has fallen more than $50 — or 35 percent — from its all-time trading record of $147.27 reached July 11 as a global economic slowdown continues to weigh on demand for energy.
The AP is reporting that U.S. officials said Ike destroyed at least 10 oil and gas platforms and damaged pipelines in the Gulf of Mexico. But that represents only a small portion of the 3,800 production platforms in the Gulf and pales in comparison to the catastrophic damage to energy infrastructure doled out by hurricanes Katrina and Rita three years ago.