Oil prices retreat on poor economic data

Posted By: Staff
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Oil prices retreat on poor economic data
London, Dec 1 (AFP) Oil prices slid today on rising weekly US jobless claims and downbeat Chinese manufacturing data, while traders also mulled the impact of central banks' action to boost liquidity.

New York's main contract, light sweet crude for delivery in January, dropped USD 1.19 to USD 99.17 a barrel. Brent North Sea crude for January sank USD 2.16 to USD 108.36 in late London trade.

New claims for US unemployment insurance rose slightly for the second straight week, the government reported today, a day ahead of the November jobs market data.

The number of people registering for jobless benefits rose to 402,000 in the week ending November 26, the Labor Department said.

The department revised up the prior week's number to 396,000 claims. Most analysts expected claims to fall last week amid an easing trend in the weekly data.

Crude futures were also pulled lower by official data showing that Chinese manufacturing activity contracting in November for the first time in 33 months.

China's purchasing managers index (PMI) fell to 49 last month, down 1.4 points from October, marking the first contraction since February 2009, the China Federation of Logistics and Purchasing said in a statement.

A reading above 50 indicates the sector is expanding while a reading below 50 suggests a contraction. Both data releases are important for the crude market because the United States is the world's biggest consumer of oil, while China is the largest consumer of energy.

Oil had risen in earlier Asian deals after central banks in the eurozone, Canada, Britain, Japan, the US and Switzerland yesterday cut the cost of providing US dollars to banks to prop up the global financial system.

The dramatic move sparked a global equities rally yesterday as traders welcomed the latest effort to turn back the runaway eurozone crisis.


Story first published: Friday, December 2, 2011, 2:15 [IST]
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