Crude Oil Jumps on Supply Disruption Threat

Crude oil futures fell on Monday in reaction to the escalating worries over supply disruptions triggered by China’s economic data. Investors were uncertain after the news of reduced economic growth outlook by China moreover, United States and the euro zone also came up with disappointing economic data.

Chinese Premier Wen Jiabao reduced China’s economic growth target to 7.5 percent for the year 2012 as compared to 8 percent in last eight years. China happens to be the top oil consumer in the world.  Moreover, oil embargo will be take place on Iran this summer which can also change the scenario.

As for the US economy, the Institute of Supply Management released its non manufacturing index which increased to 57.3 percent in February as compared to 56.8 percent in January while analyst expected the index to decline to 55.5 percent. Factory orders fell 1 percent to $462.6 billion in January.

In euro zone, the purchasing managers’ index for the single currency region fell to 49.3 in February as compared to 50.4 in the month of January.

Crude oil futures for April delivery gained $0.02 to $106.72 per barrel on the New York Mercantile Exchange.

Among other commodities, gasoline futures for April delivery fell 0.4 percent or $0.01 to $3.26 per gallon while the heating oil futures for April delivery gained 0.5 percent or $0.02 to $3.22 per gallon.

Natural gas for April delivery declined 7.8 percent or $0.13 to settle at $2.36 per million British thermal units.


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