Oil falls on global concerns

Investing.com - Oil prices dropped in Tuesday’s Asian trading as investors sold energy assets in the wake of fears about global growth. Despite good economic data out of Australia and China, traders continued to feel the effects of Monday’s flight to safety.

On the New York Mercantile Exchange, oil futures for March delivery dropped 0.16% to USD96.02 per barrel, up from a session low of USD95.92 and down from a session high of USD96.19.

Gold futures were likely to find support USD95.43 per barrel, the low from January 23, and resistance at USD97.90, a high from February 1.

Earlier on Monday, the Australian house price index showed that housing prices rose 1.60% from the last quarter, more than the 0.30% economists had been anticipating, and significantly more than the prior reading: a drop of 0.10%.

Meanwhile, HSBC’s Services China PMI came in at 54, more than the prior reading of 51.7. A reading over 50 signals economic expansion; a expansion which appears to be growing at a faster pace.

Yet, despite this data, it was not enough to support global oil prices.

On Monday, stock markets around the globe sold off as investors wrangled with the potential of further political uncertainty in Italy and Spain. Should the debtor nations cause the euro zone to plunge into recession, it could dampen the demand for energy and send the price of crude lower.

Looking ahead, investors will soon get a decision from the Reserve Bank of Australia on its interest rate policy. Most economists expect the RBA to leave rates unchanged at three percent. However, should the bank opt to cut rates, it could spur demand for crude oil and send prices higher.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery shed 0.10% to trade at USD115.47 per barrel, with the spread between the Brent and crude contracts standing at USD19.45.