Oil down as equity markets weaken, dollar steady
Thursday, 3 June 2010
SYDNEY, June 2 (Dow Jones): Crude-oil futures fell in Asian trading Wednesday, following equities markets lower as worries over China's growth outlook were compounded by political uncertainty in Japan.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $72.08 a barrel at 0611 GMT, down 50 cents in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell 46 cents to $72.25 a barrel.
In an especially volatile session in the US overnight, front-month oil futures briefly rose above $75 a barrel-on the back of stronger-than expected data on US construction spending and manufacturing activity-before falling back again sharply.
Peter Beutel, of trading advisory firm Cameron Hanover, said there was an underlying nervousness in the oil market that the global economy may be starting to weaken again before strengthening for the longer term.
He cited two surveys published Tuesday showing China's manufacturing activity slowing in April from May, as government measures to cool an economy that expanded 11.9% in the first quarter and rein in lending started to work.
With the euro steady against the US dollar at $1.2205 Wednesday, the oil market took its cue from regional equity markets which were mostly lower.
Japan's Nikkei Stock Average was off 0.6% as investors reacted to news the country's Prime Minister Yukio Hatoyama will step down, while Australia's S&P/ASX 200 and China's Shanghai Composite Index fell 0.2% and 1.6%, respectively.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $72.08 a barrel at 0611 GMT, down 50 cents in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell 46 cents to $72.25 a barrel.
In an especially volatile session in the US overnight, front-month oil futures briefly rose above $75 a barrel-on the back of stronger-than expected data on US construction spending and manufacturing activity-before falling back again sharply.
Peter Beutel, of trading advisory firm Cameron Hanover, said there was an underlying nervousness in the oil market that the global economy may be starting to weaken again before strengthening for the longer term.
He cited two surveys published Tuesday showing China's manufacturing activity slowing in April from May, as government measures to cool an economy that expanded 11.9% in the first quarter and rein in lending started to work.
With the euro steady against the US dollar at $1.2205 Wednesday, the oil market took its cue from regional equity markets which were mostly lower.
Japan's Nikkei Stock Average was off 0.6% as investors reacted to news the country's Prime Minister Yukio Hatoyama will step down, while Australia's S&P/ASX 200 and China's Shanghai Composite Index fell 0.2% and 1.6%, respectively.