Economic Fears Spread to Europe as Oil Continues to Tumble

Oil continues its nosedive as demand continues to slacken in response to economic fears spreading in Europe.

Oil consumption in the U.S. fell by 7.1 percent over the last four weeks in contrast to last year during the same time. Use is now at about 19 million barrels a day in the U.S.

Crude had dropped as low as $87.56 a barrel in the afternoon, while settling at $87.80 for November delivery of light sweet crude. That was a fall of $6.07 for the day.

Brent North Sea crude also fell significantly, settling at $83.68 a barrel for November delivery, dropping $6.57 for the session.

The lagging participation of the European economy in the economic downturn is now over, and what has happened in the U.S. is now emerging in Europe. That has also caused the U.S. dollar to strengthen significantly against the euro, while also causing gold to be held back for now as a safe haven.

For oil, the new world of bailouts and economic fears leaves it in a place of probable continued decline in price as demand slows around the globe. India and China demand will slow as well, with China now exporting some gasoline because of slow domestic demand.

As far as the U.S. bailout by the government, it didn't do much to placate investors, as they have started to pour their money into short-term dollar-denominated financial instruments like U.S. Treasuries.