Connect to share and comment

Oil prices slip on US data

PlacardEnlarge
(Globalpost/GlobalPost)

Global oil prices slid on Wednesday as investors fretted over weaker-than-expected economic growth data and the latest snapshot of crude inventories in top consumer the United States.

Brent North Sea crude for delivery in August dipped 27 cents to stand at $100.99 a barrel in London late afternoon deals.

New York's main contract, West Texas Intermediate light sweet crude for August, shed 58 cents at $94.75 a barrel.

The oil market fell after the Commerce Department slashed its estimate for growth in the January-March period to just 1.8 percent, compared to the previous estimate of 2.4 percent.

"Crude oil turned lower ... as demand concerns came back to the forefront following the release of some disappointing economic data," said analyst Fawad Razaqzada at traders GFT Markets.

"Consumer spending and business investment were both weaker than initially thought, while exports -- previously reported to have grown -- had actually dropped 1.1 percent on the quarter."

Crude futures also fell back after the US Energy Information Administration announced that American oil reserves were flat at 394.1 million barrels in the week ending June 21.

Market expectations had been for a drop of 1.7 million barrels, according to analysts polled by Dow Jones Newswires.

The EIA added that gasoline or petrol stockpiles surged by 3.7 million barrels.

That outstripped expectations for a gain of just 660,000 barrels and indicated weaker-than-expected demand.

"The inventories data underscores a growing feeling among analysts that demand remains just too weak to rationalise a barrel of Brent crude above $100 and WTI $95, especially as there is also ample, and rising, supply of oil in North America," added Razaqzada.

Gasoline or petrol demand is normally expected to surge in the summer season, when Americans take to the roads for their holidays.

burs-rfj/arp

http://www.globalpost.com/dispatch/news/afp/130626/oil-prices-slip-us-data