Bad Fundamentals in USA Slash Demand for Crude Oil
Crude oil fell today on signs that economic growth in the United States is slowing. Retail sales fell in May. The Producer Price Index was down as much as 1 percent last month, following the decrease by 0.2 percent in the month before. Analysts predict that tomorrow’s report would show inflation slowing by 0.2 percent. Slower economic growth means less demand for fuel.
Europe and its debt problems continue to have a negative impact on markets, reducing demand for raw materials. German and Italian borrowing costs rose. Elections in Greece will be held this weekend adding to uncertainty about the future of the eurozone. Both the Standard & Poor’s 500 Index and Dow Jones Industrial Average lost 0.9 percent today.
July for delivery of crude oil declined $0.7 to $82.62 per barrel on NYMEX, the lowest price since October 6. Brent crude closed flat at $97.10 per barrel on ICE today, following the intraday jump to $98.38.
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