Crude-oil futures declined Thursday, after hitting a six-month high the previous day, as worries about the state of the economy in the U.S. and U.K. weighed on prices.
Crude for July delivery fell $1.35 a barrel to $60.69 in electronic trading after Wednesday saw the highest closing level for a front-month contract since Nov. 10.
Adding to pessimism over the state of the global economy, Standard & Poor's on Thursday cut its outlook on the U.K. to negative from stable, in view of the country's swelling debt.
The move by Standard & Poor's raises the prospect not only of a credit-rating downgrade in Britain but a lowering of the outlook in the U.S., which has taken a similar path of big spending and quantitative easing to escape the credit-led recession. See full story.
The S&P outlook cut came after Federal Reserve officials on Wednesday projected a deeper recession than they had expected three months earlier and a more sluggish recovery over the next two years.
Edward Meir, an analyst at MF Global, said oil markets could also be in line for a "modest setback" after the holiday weekend is over.
"By most projections, driving traffic will be lighter than last year, and if this proves correct, we could expect to see a continuation of weak year-over-year demand comparisons," he said in a note to clients.
