Oil prices sink under 75 dollars on dire US economic data

19th August 2010, Comments 0 comments

World oil prices fell sharply on Thursday in response to a batch of poor economic data which sparked fresh questions about the fragile economic recovery in top energy consuming nation the United States.

New York's main contract, light sweet crude for September, lost 97 cents to 74.45 dollars per barrel. The contract expires at the close of trade.

Brent North Sea crude for delivery in October plunged 1.02 dollars to 75.45 dollars a barrel in late afternoon London trade.

"Today's news on the US economy has been nothing but awful," said Paul Ashworth, senior US economist at the Capital Economics consultancy in London.

"The collapse in the Philly Fed activity index to a 13-month low of -7.7 in August, from +5.1, suggests the industrial recovery is teetering on the brink."

In addition, the US government revealed on Thursday that the number of Americans filing new weekly claims for jobless benefits jumped unexpectedly to 500,000, the highest level in nine months, threatening recovery hopes.

The claims in the week to August 14 increased by 12,000 from the previous week's revised figure of 488,000 -- and came well above most economists' expectations of 475,000.

It was the third straight week in which claims have risen, and underscores the threat posed by unemployment on the recovery from the worst US recession in decades.

"The recovery is clearly slowing and, under those circumstances, we would expect claims to rise," added Ashworth.

Market sentiment was already dampened on Wednesday by news of a lower-than-expected fall in US crude reserves.

US crude reserves fell 800,000 barrels in the week ending August 13, less than forecast, official figures showed on Wednesday.

Gasoline (petrol) inventories were flat, while analysts had predicted a drop of 500,000 barrels.


© 2010 AFP

0 Comments To This Article