Wednesday June 30, 2010
On Wednesday as stock markets slumped after economic data from the US and China spurred worries of a stalling economic recovery, oil prices extended losses in Asian trade.
London’s Brent North Sea crude for August was down 23 cents to USD 75.21, while New York’s main contract, light sweet crude for delivery in August, shed 13 cents to USD 75.81 a barrel.
On Tuesday sentiments remained dampened by reports showing wilting American consumer confidence and weaker Chinese economic indicators that sent both contracts plummeting more than two dollars.
David Moore, a Sydney-based commodity strategist with Commonwealth Bank of Australia, said, “Some of that news is continuing to weigh on markets”. He told, “At this stage equity markets in the region remain down quite a bit so that’s probably compounding the negative mood of the oil market at the moment.”
On Tuesday a US business research firm, the Conference Board revised the April Leading Economic Indicator for China to 0.3 per cent from 1.7 per cent. In June amid increase US economic uncertainty and unemployment concerns the board announced that US consumer confidence had tumbled in June after three consecutive monthly rises.
The US stocks were also affected with all three major indices ending lower Tuesday, because of lower numbers. Before closing 268.22 points or 2.65 per cent lower at 9,870.30 the blue-chip Dow Jones Industrial Average tumbled by more than three per cent. In twenty sessions it was the first time the Dow had closed below the psychologically sensitive 10,000 level.
The broad-market S&P 500 index dropped 33.33 points (3.10 per cent) to close at 1,041.24 and the tech-rich NASDAQ index shed 85.47 points (3.85 per cent) to 2, 135.18.
For a clearer sign demand in the world’s largest oil-consuming nation, Moore said crude prices could continue to trade on the downside as markets await Thursday’s manufacturing data from the US. He said, “The outlook remains uncertain and there is still significant potential for volatility. You certainly couldn’t say that oil prices have bottomed out at the moment.”
