Oil Knows Smart Money Sees No Inflation With Futures Drop

For signs of just how much inflation concerns have been erased by the global economic slowdown, look no further than oil.

West Texas Intermediate crude, the U.S. benchmark, plunged 24 percent since June 20 to $81.84 a barrel yesterday, the lowest in more than two years, and extended losses today. A year ago, WTI for delivery this month traded at $95.91 a barrel, a level that implied a 6.3 percent decline over the next 12 months. Prices ended up falling even more as demand slowed across Europe and Asia and the dollar rallied, touching a two-year high against the euro.