Crude slips after figures show slower growth in US and China
CRUDE oil fell the most in six weeks yesterday on signs that economic growth in both the US and China -- the world's biggest energy-consuming countries -- is slowing.
It slipped as much as 2.9pc after China's industrial output grew by the least in 11 months and the Federal Reserve said the US recovery was decelerating. Futures extended declines after the US Energy Department reported that fuel supplies climbed last week.
"The Chinese economy is showing signs of weakness and the picture here is worsening," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
"The economic picture isn't rosy. The question now is where we will find support as we move south."
Crude oil for September delivery fell 2.5pc to $78.22 a barrel during afternoon trading in New York. Futures dropped the most since July 1.
Brent crude oil for September settlement slipped 2.4pc to $77.73 a barrel in London.
China's year-on-year industrial production growth slowed to 13.4pc in July, the statistics bureau said in Beijing yesterday.
In June, the increase was 13.7pc. July's rate was the smallest since August last year after excluding distortions caused by holidays at the start of each year.
"The markets are once again responding to negative economic news from China," said Tom Bentz, a broker at BNP Paribas in New York.
"Chinese industrial output isn't growing as fast and the retail sales numbers were disappointing."
Federal Reserve policy makers on Tuesday announced more steps to bolster an economy that it said is starting to weaken.
The Fed's Open Market Committee said in a statement: "The pace of economic recovery is likely to be more modest in the near term than had been anticipated." (Bloomberg)