Oil plunges for fourth straight day on weak data, high inventories

09:40, August 04, 2011      

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Crude prices plunged on Wednesday on U.S. weak economic data and rising crude inventories, posing the fourth straight decline.

Crude prices shrugged off the positive data that private sectors added 114,000 jobs in July, beating estimates, as investors more focused on the weak data both in the U.S. and Europe.

According to the Commerce Department, U.S. factory orders in June dropped 0.8 percent. And the Institute for Supply Management' s non-manufacturing index dipped to 52.7 in July, showing the U.S. service sector expanding at the slowest pace in 17 months. More and more signs pointed to a gloomy economic perspective.

In Europe, the Italian and Spanish bond spreads kept widening, showing the concerns about the sovereign debt crisis continued to be strong.

Driven by fears of weak economic growth across the world, U.S. stocks market were slipping for most of the trading session on Wednesday. The decline of equities, regarded by crude investors as sign of less oil demand in future, pressured oil markets.

Besides, the U.S. Energy Information Administration said the U. S. crude stocks built more-than-expected 1.0 million barrels last week and the gasoline inventories posted the third straight weekly rise of 1.7 million barrels.

Light, sweet crude for September delivery fell 1.86 dollars, or 1.98 percent to settle at 91.93 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for September delivery tumbled 3.23 dollars, or 2.77 percent to close at 113.23 dollars a barrel.


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