Oil Drops a Sixth Day on Slower Europe, China Economic Recovery
Crude oil dropped for a sixth day in New York on concern that the pace of economic recovery is slowing in Europe and China, stalling a rebound in fuel demand.Oil fell below $72 a barrel as the China Automotive Technology & Research Center said car sales expanded at a slower pace in June. European stocks declined for a fifth day, the longest losing streak in a year, as a report showed growth slid in the region’s services and manufacturing industries.
“Crude has come under a bit of pressure because of worries about the global economy,” said Peter McGuire, managing director of CWA Global Markets Pty in Sydney. “Sentiment is negative. Looking at mature markets, it’s pretty bleak. Europe is looking terrible.”
Crude oil for August delivery dropped as much as $1.05, or 1.5 percent, to $71.09 a barrel in electronic trading on the New York Mercantile Exchange, and was at $71.63 at 11:48 a.m. Singapore time. Floor trading was closed yesterday on the Nymex for the U.S. Independence Day holiday and electronic trades are booked into today’s for settlement purposes.
The market is in its longest pullback since a six-day drop through May 18. Crude oil has declined 10 percent this year.
Prices also fell as a Chinese services-industry index slid to a 15-month low, adding to signs that the economy leading the world recovery is cooling. The measure fell to 55.6 from 56.4, HSBC Holdings Plc and Markit Economics said yesterday.
Recent Rally ‘Vulnerable’
“Right now, it does look like crude oil has not only broken down at $82, the recent rally above $76 was vulnerable,” said Thomas Schroeder, managing director at Chart Partners Group Ltd. in a Bloomberg Television interview from Bangkok. “That’s a sell level for me.”
Brent crude oil for August settlement dropped as much as 70 cents, or 1 percent, to $70.77 a barrel on the ICE Futures Europe exchange in London, and was at $71.30 at 11:47 a.m. in Singapore. Yesterday, the contract fell 0.3 percent to $71.47.
In Europe, a composite index based on a survey of euro-area purchasing managers in the services and manufacturing industries dropped to 56 in June from 56.4 in May, Markit Economics said.
Source: Bloomberg
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