Crude Oil Plunges To End Below $45 Post Fed Decision

(RTTNews) - U.S. crude oil futures plummeted a near 5 percent to settle lower Friday, on demand growth concerns after the Federal Reserve decision not to hike interest rates sparked off fears of widespread global economic slowdown.

Fearing the global economic slowdown, the Fed held steady on interest rates instead of hiking them for the first time in a decade. However, most Fed officials have said that a rate hike would be appropriate this year given the recent pace of economic activity.

In 2008, the Fed cut its benchmark lending rate to a record low near zero, where it has remained since.

Meanwhile, oil drilling rig count in the U.S. dropped for a third straight week. Oil services firm Baker Hughes Inc., in its weekly rig count on Friday said U.S. rigs actively drilling for oil dropped by 8 units to 644 rigs as of September 18. The total active rig count, including natural-gas rigs, was 842, down 6 rigs.

Most markets around the world reacted negatively to the Fed's stand that recent global economic and financial developments may restrain economic activity somewhat and likely to put further downward pressure on inflation in the near term.

Federal Reserve policy makers expressed concerns over the economic headwinds including problems in China.

If the Fed is going to raise rates this year, it will likely be in December since there is no scheduled press conference after the upcoming October meeting. Yellen said that October is a "live meeting" that could produce a rate hike, but most Fed watchers think she will want a chance to soothe investors if there is a market tantrum.

Light Sweet Crude Oil futures for October delivery plunged $2.22 or 4.7 percent, to settle at $44.68 a barrel on the New York Mercantile Exchange Friday.

Crude prices for October delivery scaled a high of $47.03 a barrel intraday and a low of $44.24.

On Thursday, crude oil dropped $0.25 or 0.5 percent, to settle at $46.90 a barrel, after the Federal Reserve decided not to hike interest rates on concerns over global economic headwinds that could impact economic activity.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.86 on Friday, up from its previous close of 94.54 in late North American trade on Thursday. The dollar scaled a high of 94.90 intraday and a low of 94.06.

The euro trended lower against the dollar at 1.1356 on Friday, as compared to its previous close of 1.1437 in North American trade late Thursday. The euro scaled a high of 1.1461 intraday and a low of 1.1348.

On the economic front, a report from the Conference Board on Friday showed a slight uptick in its index of leading U.S. economic indicators in August, suggesting economic growth will remain moderate into next year.

The Conference Board's leading economic index inched up 0.1 percent in August, while revised data showed no change in July. Economists expected the index to rise by 0.2 percent compared to the 0.2 percent drop originally reported for the previous month.

Eurozone current account surplus declined in July as the deficit on secondary income widened from June, the European Central Bank reported Friday. The current account surplus decreased to EUR 22.6 billion in July from EUR 24.9 billion in June.