US crude futures fall to March 2009 lows

US stocks had fallen more than 1 percent earlier in the day as investors worried about the effect of China’s slowing growth ahead of the release of the minutes.

At 13:55 pm ET (1755 GMT) the Dow Jones industrial average was down 127 points, or 0.73 percent, at 17,384.34. The S&P 500 was down 14.23 points, or 0.68 percent, at 2,082.69 and the Nasdaq Composite was down 30.88 points, or 0.61 percent, at 5,028.47.

Energy and material stocks were whipsawed by wild swings in the Chinese market, which first fell sharply and then reversed course to end higher after the central bank injected more funds into the financial system.

The roller coaster ride in the Chinese market kept commodity prices under pressure, with oil and copper near sixyear lows.

All the 10 major sectors were lower, with four of them down more than 1 percent. The energy index led the losses, slipping 2.7 percent in its worst day in about two weeks, as shares of oil majors Exxon and Chevron fell more than 2 percent.

US consumer prices rose slightly in July, marking the sixth straight month of increases and suggesting inflation pressures were stabilizing enough to support expectations of a rate hike this year.

European stock markets fell on Wednesday, extending a recent losing streak after US inflation data supported expectations of a rate rise, while brewer Carlsberg slumped after cutting its outlook.

News that German lawmakers had voted to back a third bailout for Greece had little positive effect, with the focus firmly on fears of a fresh slowdown for the global economy as China battles with plunging exports and white-knuckle stock-market moves.

The pan-European FTSEurofirst 300 index, which has just suffered its worst week in more than a month, closed down 1.8 percent. The euro zone’s blue-chip Euro STOXX 50 index was also down 1.9 percent.

Carlsberg was one of the worst performers on the FTSEurofirst, falling 9.2 percent after cutting its profit forecast. The stock marked its worst one-day fall in four years.

Miner and commodities trader Glencore sank to an all-time low after profits fell on a slide in metal and oil prices. The company said capital spending next year was expected to be lower than this year.

Britain’s top share index fell on Wednesday to its lowest level since January, hit by anxiety over top metals consumer China’s economy, with Glencore leading the mining sector lower after poorly-received results.

Miner and commodities trader Glencore was the top FTSE 100 faller, dropping 9.7 percent to a record low after a 29 percent fall in first-half earnings due to a slide in metal and oil prices.

Some questioned whether a decrease in the firm’s debt and cuts in capital expenditure went far enough.

“I think that the cutback on the capex wasn’t big enough,” said Zeg Choudhry, managing director at LONTRAD.

The mining sector dropped 4.7 percent to its lowest level since 2009, hit by weaker metals prices as fears grow that demand from China will take a hit.

Anglo American, BHP Billiton and Rio Tinto fell between 4.4 and 3.7 percent.

The blue-chip FTSE 100 index was down 122.84 points, or 1.9 percent, at 6,403.45 points by the close. That was its lowest closing level since Jan 15, and more than 10 percent below a record high of 7,122.74 points hit in April.

China’s stock markets were highly volatile on Wednesday despite government efforts to stabilise them, ending higher after the central bank injected more funds into the financial system for the second day in a row.

Fears over the state of China’s economy, the world’s second-largest, have eclipsed worries about Greece’s debt problems, with the devaluation of the yuan on Aug 11 adding to concerns.

Asian shares were mixed on Wednesday, with Shanghai rebounding from heavy falls to close higher on expectations of more state support while Tokyo slumped after the release of weak trade data.

The dollar broadly weakened before the release of minutes from the US Federal Reserve’s last meeting, which investors hope will offer fresh clues about the timing of an interest rate rise.

Seoul closed down 0.86 percent, or 16.88 points, at 1,939.38, while Sydney gained 1.45 percent, or 77.05 points, to 5,380.20.

Tokyo fell 1.61 percent, or 331.84 points, to 20,222.63, after news Japan’s exports are slowing added to concerns about the world’s number three economy as demand falls in China.

Shanghai ended a see-saw session up 1.23 percent, or 45.95 points, at 3,794.11, while Hong Kong lost 1.31 percent, or 307.12 points, to end the day at 23,167.85 — its lowest since December.

Chinese shares erased a more than five percent plunge in morning trade, in a surge dealers said was driven by what looked like fresh government support for the market. In other markets: Malaysia’s main index gained 0.18 percent, or 2.84 points, to close on 1,582.44.

Telekom Malaysia added 1.78 percent to 6.29 ringgit, RHB Capital rose 0.15 percent to 6.53 while Tenaga Nasional lost 0.19 percent to 10.44 ringgit.

Bangkok stocks rose 0.47 percent, or 6.51 points, to 1,379.12.

Airports of Thailand slipped 2.24 percent to 262.00 baht while Siam Commercial Bank rose 1.06 percent to 142.50 bhat.

Jakarta ended down 0.58 percent, or 26.24 points, at 4,484.24.

Steel manufacturer Krakatau Steel gained 8.62 percent to 353 rupiah, while food company Tiga Pilar Sejahtera fell 8.26 percent to 1,555 rupiah.

Singapore closed 0.28 percent, or 8.40 points, lower at 3,041.25.

Property developer CapitaLand fell 0.66 percent to end at Sg$3.03 and Singapore Telecom was unchanged at Sg$4.03.

Mumbai ended up 0.36 percent, or 100.10 points, at 27,931.64.

Chemical manufacturing conglomerate Atul gained 10.23 percent to 1,500.90 rupees, while automotive firm Amtek Auto slipped 30.77 percent to 89.00 rupees.

Taipei fell 1.90 percent, or 155.38 points, to 8,021.84.

Camera lense maker Largan Precision shed 4.01 percent to Tw$2,875.0 while Fubon Financial Holding closed 2.53 percent lower at Tw$50.10.

Wellington rose 0.69 percent, or 39.27 points, to 5,750.03.

Fletcher Building closed up 2.77 percent at NZ$7.79 and Spark New Zealand was also up 2.77 percent at NZ$2.785.

Manila slipped 0.15 percent, or 11.28 points, to 7,344.73.

Top-traded GT Capital dropped 0.31 percent to 1,290 pesos, Philippine Long Distance Telephone was up 1.09 percent to 2,770 pesos while Alliance Global was down 6.25 percent to 20.25 pesos.

Oil prices fell about 4 percent on Wednesday, with US crude hitting 6-1/2 year lows and threatening to break below $40, after a huge unexpected stockpile build in the United States reinforced concerns about a growing global oil glut.

US crude inventories rose by 2.6 million barrels last week to 456.21 million, the government’s Energy Information Administration said.

The figures stunned energy market analysts on Wall Street, as well as traders and investors who had been expecting a stockpile drawdown despite the peak US summer driving season nearing its end and refinery problems cutting fuel processing capabilities.

As late as Tuesday, the American Petroleum Institute, an industry group, forecast a 2.3 million barrel drawdown for the week to Aug 14. A Reuters poll of analysts had predicted an 800,000-barrel decline.

“The numbers were a total surprise with crude showing a build when the whole Street was forecasting a draw,” Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York, said.

Gold prices rose 1 percent on Wednesday as concerns over the Chinese economy knocked equities, and ahead of minutes of the Federal Reserve’s last policy meeting, which could give fresh clues on whether US interest rates will rise next month.

Spot gold was up 0.8 percent at $1,126.38 an ounce at 1158 GMT, having touched a one-month high at $1,129.01. US gold futures for December delivery were up $8.80 an ounce at $1,125.70.

The metal has risen nearly 3 percent this month after a failure to maintain a drop below $1,100 an ounce prompted investors holding short positions to close out those bets.