Slump in oil prices gives pause to rally on global stock markets
By Saqib Iqbal Ahmed
NEW YORK (Reuters) - Oil prices tumbled on Monday on worries of a crude glut, putting pressure on energy shares and giving pause to global equity prices, which have rallied to their highest in nearly a year.
The U.S. dollar recovered some ground against a basket of major currencies after its worst week in three months.
A near 15-percent slump in U.S. crude prices in July, the worst monthly loss in a year, triggered liquidation as trading began for August and U.S. crude fell below $40 per barrel for the first time since April.
"It's stop-loss technical selling combined with sheer liquidation by those fearing we'll soon be swimming in oil again," said Phil Davis, trader at PSW Investments in San Diego, California.
Brent crude LCOc1 settled down $1.39, or 3.19 percent, at $42.14 a barrel, while U.S. crude CLc1 settled down $1.54, or 3.70 percent, at $40.06.
Energy shares were hit hard and global equity prices pulled back a little after rising to the highest in nearly a year. MSCI's world stocks index .MIWD00000PUS, which tracks shares in 45 nations, was down 0.11 percent.
The S&P, which has been on a record-setting rally, hit an intraday all-time high earlier in the session. Continued...