MW: Crude futures falls below $75 on global growth worries
By Claudia Assis and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) -- Crude-oil futures fell for a fourth consecutive session 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 $1.11, or 1.7%, to $74.44 a barrel on the New York Mercantile Exchange. A close around those levels would send oil back to levels last seen mid June.
Oil held on to losses after a surprise increase in the number of people filing jobless claims in the past week. The Labor Department reported Thursday a rise by 13,000 to 472,000 in the week ended June 26. Expectations were of a decline.
"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 closely 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 more economic data from the United States, with the June Institute for Supply Management manufacturing index and May pending home sales are still due for release on Thursday.
U.S. stocks opened slightly higher Thursday. The Stoxx Europe 600 index (ST:SXXP 241.44, -1.88, -0.77%) fell 1.2% to 240 points as bearishness bled into European bourses from selling overnight in Asia.
