Forexpros – Crude oil futures added to losses on Wednesday, falling to a two-day low following the release of weaker-than-expected euro zone manufacturing data, which exacerbated concerns over an already bleak global outlook.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD96.91 a barrel during European morning trade, tumbling 1.12%.
It earlier fell by as much as 1.57% to trade at a two-day low of USD96.41 a barrel.
Crude prices extended losses after preliminary data released earlier showed that manufacturing activity in the euro zone slumped to the lowest level since July 2009 in November, falling to 46.4.
Separate data showed that manufacturing output in Germany also dropped to a 28-month low of 47.9, underlining fears that the euro zone could be slipping into a recession.
Energy traders pay close attention to manufacturing numbers, as they are used to gauge future oil demand growth.
Crude prices came under pressure during the Asian trading session after China’s HSBC preliminary manufacturing purchasing managers’ index fell to a contractionary reading of 48.0 in November, down from 51.0 in October.
It was the lowest level since March 2009, renewing fears over a ‘hard landing’ for the world’s second largest oil consumer.
Concerns over a slowdown in demand from the U.S. also weighed after the U.S. Commerce Department on Tuesday cut its estimate for third quarter gross domestic product growth to 2.0% from an earlier reading of 2.5%.
Adding to global worries, Belgian media outlets reported that Belgium and France were in fresh talks over an existing rescue deal for troubled lender Dexia, which could see France take on a larger role in the bailout plan.
The news boosted the U.S. dollar, which usually pressures dollar-denominated commodities. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.41% to trade at 78.73.
Meanwhile, oil traders were awaiting key weekly government data on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The report was expected to show that U.S. crude oil stockpiles fell by 0.5 million barrels last week, while gasoline supplies were forecast to rise by 1.0 million barrels.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery fell 0.69% to trade at USD108.28 a barrel, with the spread between the Brent and crude contracts standing at USD11.37 a barrel.
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