Crude oil prices declined for the fifth day Monday as sentiment was dampened after reports indicated a slowdown in China's nonmanufacturing activity and U.S. employment.
Crude-oil futures turned weaker Thursday, erasing early strong gains after Federal Reserve Chairman Ben Bernanke stopped short of signaling imminent new Fed action to stimulate the economy. Oil rigs are seen in Midland, Texas, in this file photo. Oil rigs are seen in Midland, Texas, in this file photo.
Light sweet crude for July delivery declined 1.66 percent to $81.57 a barrel, the lowest level since October, in electronic trading on the New York Mercantile Exchange during European trading hours. Brent crude oil futures for July delivery plunged 2.47 percent to $96.03 a barrel, the lowest level since late January 2011, on the ICE futures exchange in London.
"Brent at $100 was a strong psychological support and we just blew through that. So now I think people will be taking their money out of risky assets because everybody is afraid to pick a bottom," Tony Nunan, risk manager at Mitsubishi Corp., told Reuters.
Disappointing U.S. jobs data and China's weak nonmanufacturing sector growth sparked concerns that demand could slow in the world's largest and second-largest oil consumers.
China's nonmanufacturing sector grew at a slower pace than expected in May, raising concerns about the slowdown in Asia's largest economy. The country's Purchasing Managers' Index (PMI) declined to 52.2 in May from 56.1 in the previous month as the continuing debt crisis in Europe and the government's efforts to curb the property market boom affected the services industries.
The U.S. Labor Department said Friday that only 69,000 jobs were added in May and the unemployment rate rose for the first time in 11 months to 8.2 percent from 8.1 percent in the previous month. The figure was far below estimates of analysts polled by Thomson Reuters of 150,000 job gains in May and heightened fears that the strength of economic recovery in the world's largest economy was losing steam.
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