Monday, July 5, 2010

Crude Oil Drops for Sixth Day on Concern Over Slowing Chinese 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.
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