Oil prices sink on growth concerns
2012-09-05 17:22:34
Crude oil prices sank Tuesday on concerns about slowing global economic growth, renewed after the United States joined Europe and China in reporting manufacturing weakness.
New York's main contract, light sweet crude for October closed at $95.30 a barrel, down $1.17 from Friday's close. All US markets were closed Monday for a holiday.
Brent North Sea crude for delivery in October fell $1.60 to $114.18 a barrel in London trade.
In the US, the world's biggest consumer of crude, manufacturing unexpectedly shrank for a third straight month in August to its lowest level of the year, the Institute for Supply Management (ISM) said Tuesday.
The report came on the heels of Monday's weak August data for China, the world's biggest energy consumer, and the 17-nation eurozone.
China's manufacturing activity fell for a tenth consecutive month to its lowest level in more than three years in August, while the Markit research firm reported eurozone manufacturing activity shrank for a seventh month.
The commodities markets "continue to be pressured by a slowing economy," said Michael Haigh at Equity Station after the ISM report.
Adding to the gloom was a US Commerce Department report showing construction spending fell in July after three months of gains.
"Since 2008, the fundamentals have taken a back seat to the macro, and every time you have macro data or a policy announcement... (there is) an expectation that demand will be damaged," he said.
"But it is just a short-term reaction to data."
Traders were hoping that the bleak European and Chinese manufacturing data would lead to more stimulus soon, said Nick Trevethan, senior commodities strategist for ANZ Research in Singapore.
"Certainly the data of late I think has been supportive of policy easing. China's in particular do suggest something needs to be done there," he told AFP.
All eyes are now on the European Central Bank's meeting on Thursday, with expectations mounting that its president Mario Draghi could unveil a defense to protect the eurozone from a stressed bond market.