MW: Crude futures extend losses on global growth worries
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Crude-oil futures fell back below $75 a barrel Thursday, giving ground after weak manufacturing data out of China rekindled concerns about a slowdown in global economic growth and its potential impact on energy demand.
Light, sweet crude for August delivery dropped 91 cents to $74.72 a barrel in electronic trading on Globex. The contract earlier hit an intraday low of $74.21 a barrel.
"Commodity markets are mostly lower, as weaker-than-expected data from China and Moody's warning on Spain's credit rating are increasing investor worries over global growth," said analysts at Action Economics.
Moody's Investors Service warned on Wednesday that it may downgrade the triple-A sovereign credit ratings on Spain, citing worsening economic conditions.
In China, two close watched measures of manufacturing activity released Thursday pointed to slowing growth in June, further escalating worries over the state of the world's economic recovery. Read more on China.
Oil prices tend to be closely correlated with the outlook for global growth. As a result, bad economic news usually triggers declines in crude futures.
On Wednesday, oil futures ended lower on the New York Mercantile Exchange following a government report on U.S. petroleum inventories that was perceived as bearish. Crude prices lost 9.3% during the three months through June, ending a winning run of five consecutive quarterly gains.
Energy traders are bracing for a string of economic data from the United States. Weekly jobless claims, the June Institute for Supply Management manufacturing index as well as May pending home sales are all due for release.
U.S. stock futures traded lower on Thursday, tracking losses in European equities. The Stoxx Europe 600 index (ST:SXXP 240.56, -2.76, -1.13%) fell 1.2% to 240 points as bearishness bled into European bourses from selling overnight in Asia.
