MARKET UPDATE: Oil Falls Below $88 on IMF Growth Cut

The price of oil is the next domino to fall in a hellish week for commodities. 

Crude oil dropped below $88 Wednesday after the International Monetary Fund on Tuesday lowered its outlook for world economic growth.

Associated Press reported benchmark oil for May delivery was down 73 cents to $87.99 a barrel on the New York Mercantile Exchange, as the trading day got underway in New York. The price of crude lost three percent on Monday amid a historically-turbulent day in the markets that saw gold recording its worst one-day drop in 30 years.

The reason for oil’s fall is the IMF’s statement that it is lowering its outlook for global economic growth this year to 3.3 percent from its January forecast of 3.5 percent. AP reports Lorraine Tan, director of Standard & Poor’s equity research in Singapore, as saying that “a ‘pretty sluggish’ global economic recovery, increasing energy production in the U.S. and slightly slower growth in China are putting pressure on oil prices.”