Crude oil under pressure amid global demand concerns
Investing.com
Published May 27, 2013 04:05AM ET
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD93.62 a barrel during European morning trade, down 0.55% on the day.
New York-traded oil prices fell by as much as 0.9% earlier in the session to hit a daily low of USD93.26 a barrel.
There will be no floor trading in New York on Monday because of the Memorial Day holiday. All electronic transactions will be booked with Tuesday’s trades for settlement.
Oil prices fell to a three-week low of USD92.24 a barrel last Thursday after data showed that manufacturing activity in China contracted for the first time in seven months in May.
China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to a seven-month low of 49.6 in May from a final reading of 50.4 in April.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Market sentiment was also dampened amid speculation over an earlier-than-expected end to the Federal Reserve’s asset purchase program.
Fed Chairman Ben Bernanke said last week a decision to scale back the U.S. central bank’s USD85 billion-dollar-a-month asset purchase program could be taken in the "next few meetings" depending on economic data.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery shed 0.3% to trade at USD102.32 a barrel, with the spread between the Brent and crude contracts standing at USD8.70 a barrel.
The gap between the contracts narrowed to the lowest level since January 2011 earlier in the month, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.
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Written By: Investing.com
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