NEW YORK --- Oil prices fell sharply Monday, Sept. 15, as Wall Street's problems continue to fuel the economic slowdown that has been stripping demand for energy, CNNMoney.com reported.
Moreover, early reports showed that Hurricane Ike did not do as much damage as was originally expected in the Gulf Coast region.
Oil was trading down $3.96 to $97.22 a barrel. It traded as low as $94.13, CNNMoney.com reported.
The last time oil traded below $94.13 was Feb. 14, when the intraday low was $93.25, according to New York Mercantile Exchange. The last time that oil closed below $94.13 was Feb. 13, when oil settled at $93.27 a barrel.
This price decline started in a special early-start Sunday electronic trading session that was scheduled to allow the oil market to assess damage from Hurricane Ike.
Meanwhile, the financial markets crisis keeps growing deeper. Over the weekend, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis. Lehman Brothers filed for bankruptcy protection after it failed to find a buyer.
"Growing fears about the economy are trumping any fears about the damage caused by Hurricane Ike,'' John Kilduff, senior vice president of risk management at MF Global Inc. in New York, told Bloomberg. "The broader issue is the weakness of the financial system. Given the Lehman and WaMu watch, cash looks better than any speculative investment.''
Barclays Plc, the U.K.'s third-biggest bank, pulled out of talks to buy Lehman Brothers Holdings Inc. Today, Washington Mutual Inc. plummeted 22 percent in mid-day trading.
Fourteen refineries in Texas and one in Louisiana shut 3.86 million barrels a day of refining capacity as Ike approached the Gulf Coast, Bloomberg reported. Valero said it found "no significant structural damage'' at three Houston-area refineries shut before the storm. One Valero refinery had power, the company said. Marathon Oil Corp. and Motiva Enterprises LLC said they're evaluating their plants.