BLBG: Oil Falls First Day in Four in New York on Signals Economic Growth to Slow
Crude oil fell for the first time in four days in New York on concern the global economic recovery is slowing and as the euro dropped against the dollar, reducing the appeal of commodities to investors.
Oil declined as much as 2.5 percent and equities slipped after China reported a smaller-than-estimated trade surplus today. India’s industrial output growth eased in April and U.K. manufacturing dropped. The euro fell against the dollar as European Central Bank President Jean-Claude Trichet signaled a slowing pace of interest-rate increases.
“The oil market is lower on the combination of a weaker stock market and the falling euro,” said Peter Beutel, the president of Cameron Hanover Inc., an energy advisory company in New Canaan, Connecticut. “Concerns about the economy have been sending stocks lower for most of the last week and the oil market is catching up.”
Crude oil for July delivery declined $2.32, or 2.3 percent, to $99.61 a barrel at 9:53 a.m. on the New York Mercantile Exchange. Prices are down 0.6 percent this week and are 32 percent higher than a year earlier.
Brent crude for July delivery decreased $1.11, or 0.9 percent, to $118.46 a barrel on the London-based ICE Futures Europe exchange. The contract yesterday increased 1.5 percent to $119.57, the highest settlement since May 4.
Brent, the European benchmark contract traded at a record $18.85 premium to U.S. futures today.
Stocks Fall
The Standard & Poor’s 500 Index dropped 0.7 percent to 1,280.50, and the Dow Jones Industrial Average declined 84.05 points to 12,040.31 at 9:48 a.m. The euro was down 0.6 percent at $1.4427 after dropping to $1.4422, the highest level since June 1.
China reported a $13.1 billion trade surplus in May, as surging imports signaled the nation’s demand may support global growth. Inbound shipments rose 28 percent from a year earlier and exports gained 19 percent, the customs bureau said on its website. A $19.3 billion surplus was expected, according to the median estimate in a Bloomberg News survey.
The Organization of Petroleum Exporting Countries concluded its June 8 meeting in Vienna without reaching consensus on production targets.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
