Slowing global economy drags down Crude Oil futures

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Crude oil futures ended lower in the domestic market on Tuesday as a slowing global economy dimmed the demand outlook for the fuel. The International Monetary Fund (IMF) cut the global economic growth forecast for 2013 to 3.1% from 3.3% estimated earlier amid a slowdown in the US and China and a recession in Europe.

A pickup in China's inflation last month limited room for further policy easing to bolster economic growth in the world's second biggest crude oil consuming nation, dimming the demand outlook for the fuel.

Small business optimism in the US fell last month, raising doubts over the health of the world's biggest economy, dampening the demand prospects for the fuel. The gauge measuring small business optimism in the US fell to 93.5 in June from 94.4 in May 2013.

However, a decline in US crude oil stockpiles last week signaled improving demand for the fuel in the world's biggest crude oil consuming nation, trimming losses in crude oil futures. US crude oil stockpiles fell 9 million barrels last week, the American Petroleum Institute said.

A pickup in US job openings signaled a continued US labour market recovery, improving the demand outlook for the fuel, curbing losses in crude futures. US job openings rose to 3.83 million in May following a 3.8 million increase in the previous month.

Investors were also eying the situation in Egypt as fears remained that the political turmoil in the country may hit oil shipments through the Suez Canal and disrupt supplies.

At the MCX, Crude Oil futures, for the July 2013 contract, ended at Rs 6,209 per barrel, down by 0.66 per cent, after opening at Rs 6,244, against a previous close of Rs 6,250. It touched an intra-day low of Rs 6,156.

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Story first published: Wednesday, July 10, 2013, 12:40 [IST]
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