PRC: Oil prices drop on US data, euro zone jitters
Oil prices fell today, weighed down by weak US data, lingering concerns about the euro zone debt crisis and a stronger US dollar.
Europe’s fiscal problems again were in focus today after Moody’s changed its outlook on the EU’s top notch AAA rating to ‘negative’, reflecting the negative outlooks now assigned to key EU members including Germany, France and the UK.
The move by the rating agency put more pressure on the European Central Bank (ECB) to take action at the upcoming policy meeting on Thursday to shore up the economy.
Oil prices faced more pressure from lacklustre US data.
The Institute for Supply Management (ISM) reported that its manufacturing PMI index fell to 49.6 last month from 49.8 in July, which means that the manufacturing sector contracted at a faster pace.
In addition, the Commerce Department said construction spending tumbled 0.9 percent in July following a 0.4 percent increase in the previous month.
The negative comments from Moody’s and the US data highlighted concerns about the strength of the global economy and lifted demand for safe-haven assets such as the US dollar, making the dollar-denominated crude more expensive for holders of other currencies.
US light, sweet crude for October delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), declined 84 cents to US$95.63/barrel this afternoon.
October Brent crude dropped 97 cents to US$114.81/barrel on the ICE Exchange.
Today’s top risers in the oil and gas sector were:
Sound Oil (LON:SOU), up 5.5 percent at 0.475 pence at midday
Circle Oil (LON:COP), up 5 percent at 20.25 pence
Antrim Energy (LON:AEY), up 4 percent at 51 pence
PetroNeft Resources (LON:PTR), up 4 percent at 7.93 pence
Heritage Oil (LON:HOIL), up 3 percent at 196.15 pence
The top fallers were:
Chariot Oil & Gas (LON:CHAR), down 14.5 percent at 103.44 pence at midday
Serica Energy (LON:SQZ), down 9.5 percent at 30.23 pence
Jubilant Energy (LON:JUB), down 8.5 percent at 18 pence
Cadogan Petroleum (LON:CAD), down 7 percent at 17.5 pence
Max Petroleum (LON:MXP), down 7 percent at 3.81 pence
