04 March 2013 16:59 [Source: ICIS news]
LONDON (ICIS)--The front-month NYMEX WTI contract weakened by more than $1.00/bbl on Monday, pressured by automatic spending cuts in the US and poor economic data from China.
By 16:15 GMT, the front-month April NYMEX WTI contract had touched an intra-day low at $89.51/bbl, a loss of $1.17/bbl compared to the settlement on Friday. The contract then edged a little higher to trade around $89.70/bbl.
At the same time, the front-month April ICE Brent contract was trading around $109.80/bbl, having touched an intra-day low at $109.68/bbl, a loss of 72 cents/bbl compared to the settlement last Friday.
Automatic spending cuts in the US - known as the sequester - were put into effect last Friday after US lawmakers failed to agree on a plan to cut the US deficit. The automatic spending cuts are expected to hamper the US economic recovery, however the impact is unlikely to be felt until the second quarter.
Over the weekend, the Chinese government released its official non-manufacturing purchasing managers’ index, which showed a reading at 54.50 in February down from the reading in January at 56.20. A reading below 50.00 indicates a contraction in the sector.
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