Crude Oil Declines on Global Demand Uncertainty
Crude oil futures declined on Monday as investors remained uncertain over global demand of oil in reaction to slow Chinese economic growth. The World Bank on Monday reduced its growth forecasts for the East Asia and the Pacific region which created concerns over economic activity in the regions. The World Bank also indicated that Chinese economic slowdown could get more severe and could be longer than wide expectations.
Investors were also concerned over the single region’s economic situation. Meeting of Finance ministers from European countries in Luxembourg was closely watched by investors in search of hints that Spain could go for more bailout funds. Many analysts believed that economic uncertainty is the main factor now for moving commodities as other than euro crisis bundle of US economic worries before elections have also accumulated.
Crude oil futures contract for November delivery declined 0.6 percent or $0.55 to settle at $89.33 per barrel on the New York Mercantile Exchange. The respective contract touched the intraday low of $88.21 per barrel. The US dollar also kept pressure on the oil as the ICE dollar index DXY which tracks the movement of the greenback versus its major rivals gained to 79.593 on Monday as compared to 70.350 on Friday’s North American trading session.
Among other energy commodities, heating oil futures contract for November delivery fell 0.1 percent to $3.15 per gallon while gasoline futures for the same month slipped 1.3 percent or $0.04 to settle at $2.92 per gallon for the day. Natural gas futures contract for November slightly gained by 0.2 percent to $3.40 per million British thermal units on NYMEX.