Oil prices fall amid U.S. economic slowdown
(MENAFN) Oil prices experienced a decline during Asian trading on Thursday, driven by investor caution regarding lower demand expectations. This sentiment emerged after weaker-than-anticipated U.S. employment and business data suggested that the Economy of the world's largest oil consumer was showing signs of slowing down. Specifically, brent crude futures dropped by 48 cents, or 0.55 percent, to USD86.86 a barrel by 0342 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude futures decreased by 51 cents, or 0.62 percent, to USD83.36 a barrel, with trading activity subdued due to the U.S. Independence Day holiday.
A notable trend in the oil market is the reduction in U.S. crude shipments to Europe, which hit a two-year low in June. European buyers have turned to more affordable oil sources from the region and West Africa. However, there is potential for a rebound in these purchases in the coming months of July and August. The data released on Wednesday underscored the declining demand outlook, revealing an increase in new unemployment benefit claims last week, along with a rise in the number of people filing for unemployment benefits to a two-and-a-half-year high towards the end of June.
Adding to the economic concerns, a report indicated that private sector payrolls grew by 150,000 jobs in June, falling short of the expected 160,000 jobs and down from the 157,000 jobs added in May. Furthermore, the Institute for Supply Management's (ISM) non-manufacturing index, which measures U.S. services sector activity, plummeted to a four-year low of 48.8 in June. This was significantly below the forecasted 52.5, driven by a sharp decline in orders, further signaling a decelerating economy.
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