Tuesday, September 4, 2012

Crude Oil Falls as U.S. and European Manufacturing Pulls Back

Crude oil fell as U.S. and euro-area manufacturing contracted in August, raising concern that slower economic growth will reduce demand. Prices dropped 1.2 percent after the Institute for Supply Management’s U.S. factory index declined more than analysts forecast. Manufacturing slipped more than initially estimated in the euro area, London based Markit Economics reported yesterday.

“We are seeing downward prices because of the poor economy,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “The ISM number compounds the earlier manufacturing number from Europe, and overall, the economic data is weak.” Oil for October delivery decreased $1.17 to settle at $95.30 a barrel on the New York Mercantile Exchange. Prices are down 3.6 percent this year.

Brent oil for October settlement fell $1.60, or 1.4 percent, to end the session at $114.18 a barrel on the London based ICE Futures Europe exchange. The U.S. manufacturing index decreased to 49.6 in August from 49.8 a month earlier, the Tempe, Arizona based ISM said today.

Economists in a Bloomberg survey projected an August reading of 50, which is the dividing line between expansion and contraction.....Read the entire Bloomberg article.

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