Oil Futures Plunge As Bernanke Disappoints

Crude oil futures declined Friday as the lack of explicit hints about further quantitative easing from Fed Chairman Ben Bernanke disappointed investors.

Light sweet crude for July delivery plunged 2.26 percent or $1.92 to $82.90 a barrel in electronic trading on the New York Mercantile Exchange during Asian trading hours. Brent crude oil futures for July delivery fell 1.81 percent to $98.15 a barrel on the ICE futures exchange in London.

Market sentiment turned negative Thursday after Federal Reserve Chairman Ben Bernanke told the Congress that the Fed would wait to see if additional stimulus was needed. The noncommittal comments from the Fed Chairman disappointed investors who had hoped for a strong signal that more stimulus was on the way.

The Federal Reserve remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate, Bernanke said to the Economic Committee.

On Thursday, oil futures were sharply higher during the U.S. morning trade after the People's Bank of China lowered benchmark interest rates for the first time in three years to boost economic growth.

Bernanke didn't say there was going to be any immediate further stimulus measures, so those who bought near the bottom are selling and wiping out gains seen earlier Thursday, Gene McGillian, analyst at Tradition Energy, told the Wall Street Journal.

The People's Bank of China Thursday lowered the one-year lending rate by 0.25 percentage points to 6.31 percent from 6.66 percent and the one-year deposit rate by the same amount to 3.25 percent to shore up the slackening economic growth.

The cut is the first one since December 2008 and also raised concerns that the latest economic data for May would show further deterioration in Chinese growth.