Oil prices drop on declines in equities markets

With floor trade closed on the New York Mercantile Exchange on Monday as US markets took the day off to celebrate the birth of Martin Luther King Jr., the price of oil fell in electronic trade after equities markets plummeted in Europe and Asia.

February contracts for West Texas Intermediate crude were down as much as $2.01 to $88.56 per barrel in electronic trade, while by just past noon in New York February WTI stood at $88.64 per barrel.

With February contracts expiring on Tuesday, March contracts were more active and dropped $1.92 to $88 per barrel in early afternoon trade.

Meanwhile, Brent crude for March delivery was down as much as $1.78 to $87.45 per barrel on the ICE Futures Europe exchange in London and was at $87.51 at last report.

The declines also came as Sam Bodman, the US Energy Secretary, asked once again for Saudi Arabia to increase oil production, citing a need for increased supply and the effect of high oil prices on the US economy.