US crude falls $2/bbl on weak economic data from US, Europe, China

23 November 2011 11:51  [Source: ICIS news]

SINGAPORE (ICIS)--US crude futures fell on Wednesday, with US NYMEX crude declining by more than $2/bbl at one stage amid concerns over global demand following the released of downbeat economic data from the US, Europe and China.

At 11:19 GMT, January NYMEX light sweet crude futures (WTI) were at $96.44/bbl (€70.86/bbl), down by $1.57/bbl from the previous close. Earlier, the US benchmark fell to a session low of $95.76/bbl, down by $2.25/bbl from the previous day's close.

January Brent crude on London’s ICE futures exchange was trading at $107.91/bbl, down by $1.12/bbl from the previous close. Earlier, the North Sea benchmark fell to a session low of $107.33/bbl, down from the previous close by $1.70/bbl.

The rate of growth of the economy in the US, the world’s largest oil consumer, was slower than expected during the third quarter of 2011. On Tuesday, the US Commerce Department revised the nation’s third-quarter GDP growth down to 2%, from a previous estimate of 2.5% made in late October.

HSBC’s flash purchasing managers index (PMI) for China, the world’s second-largest oil consumer, was at its lowest level for 32 months. The PMI figure for November was set at 48, down from a level of 51 for the previous month, indicating that the manufacturing sector in China has been affected by the global economic slowdown. The PMI is a barometer of a country’s manufacturing activities and a reading below 50 indicates a contraction.

Data from the EU's statistics office, Eurostat, revealed that industrial new orders in eurozone nations fell by 6.4% in September, a significantly larger drop than previous forecasts of a 2.5% decline. Germany, France, Italy and Spain all registered large falls in industrial new orders.

($1 = €0.74)

By: James Dennis
+65 6780 4359

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