Forexpros – Crude oil futures were down for a third day on Tuesday, after data pointed to a slowdown in Chinese manufacturing activity in October and amid renewed concerns over the euro zone’s debt crisis.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at USD91.35 a barrel during European morning trade, tumbling 1.97%.
It earlier fell by as much as 2.18% to trade at USD91.16 a barrel, the lowest price since October 27.
Market sentiment was weighed after Greek Prime Minister George Papandreou reportedly said that a referendum will be held on the latest aid proposals for the debt-laden country, adding to nervousness over the region’s debt crisis.
The news prompted investors to shun riskier assets, such as stocks and commodities and flock to traditional safe haven assets like the U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rallied for a second day, climbing 0.75% to trade at a seven-day high of 77.24.
Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
Crude futures added to losses after official data released earlier showed that China’s official purchasing managers’ index fell to the lowest level since February 2009 in October, declining to 50.4 from 51.2. A reading above 50.0 indicates growing activity.
China is the world’s second largest oil consuming nation and manufacturing numbers are used as indicators for fuel demand growth.
Meanwhile, United Arab Emirates Oil Minister Mohammed al-Hamli said earlier that a reasonable price for crude oil is “between USD80 and USD100 a barrel”.
Speaking at the Singapore International Energy Week conference, al-Hamli said that it was still too early to discuss what the Organization of Petroleum Countries is likely to do when it meets to decide oil-production policy in December.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery fell 1.63% to trade at USD107.76 a barrel, with the spread between the Brent and crude contracts narrowing to USD16.41 a barrel.
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