Crude-oil futures fell below 89 U.S. dollars Tuesday as a services-sector benchmark of the U.S. economy came in much weaker than anticipated, sparking recession worries and generating fresh questions about prospects for energy demand.
Crude for March delivery declined 1.61 dollars, or 1.8 percent, to 88.41 dollars a barrel on the New York Mercantile Exchange. It dropped to an intraday low of 87.50 dollars earlier.
The non-manufacturing side of the U.S. economy, which had been the firmest pillar of the economic expansion, buckled in January, according to data reported Tuesday by the Institute for Supply Management (ISM).
The ISM non-manufacturing index fell to a reading of 41.9 percent last month, down from 54.4 percent in December, the largest one-month drop in the index's history.
A reading below 50 indicates contraction.
The U.S. Energy Information Administration is expected to report Wednesday that U.S. crude inventories rose for a fourth week, up 2.2 million barrels in the week ending Feb. 1, according to analysts surveyed by Dow Jones Newswires.
Source: Xinhua
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