The price of crude oil was extending losses Thursday morning amid concerns over demand growth after yesterday's downbeat manufacturing data out of China.
Light Sweet Crude Oil (WTI) futures for September delivery, lost $0.75 to $104.64 a barrel. Yesterday, oil lost nearly 2 percent to end at a near two-week low on demand growth concerns after some weak factory activity data out of China, the world's second largest oil consumer with the dollar strengthening against some major currencies.
China's factory activity fell to the weakest level in eleven months in July amid a continued slide in new orders and faster destocking, preliminary results of a survey by Markit Economics and HSBC revealed. The purchasing managers' index, an indicator of the country's factory sector performance, fell to 47.7 in July from 48.2 in June. An index reading below 50 suggests deterioration in activity.
Wednesday, during trading hours, the EIA said U.S. crude oil inventories dipped 2.80 million barrels and gasoline stocks shed 1.40 million barrels in the weekended July 19. Analysts expected crude oil inventories to dip 2.10 million barrels and gasoline stocks to add 900,000 barrels last week.
This morning the U.S. dollar continued to level-off from its one-month low versus the euro and sterling, while trading flat against the Swiss franc and the yen.
In economic news, confidence among German businesses improved in July, reports said citing survey results from the Ifo Institute. The Ifo business climate index rose to 106.2 in July from 105.9 in June. Economists expected an increase to 106.1. The current conditions index advanced to 110.1 in July from 109.4 in June. This was expected to rise modestly to 109.7. The expectations index, however, fell slightly to 102.4 from 102.5 in June.
Euro zone money supply growth eased unexpectedly in June, and the decline in loans to private sector worsened further, official data revealed. According to European Central Bank, M3 money supply grew only 2.3 percent annually, slower than the last month's 2.9 percent increase and the expected 3 percent growth.
The U.K. economy expanded at a faster pace as expected in the second quarter on a widespread support from production, construction and services. The increase in GDP doubled to 0.6 percent from 0.3 percent in the first quarter, preliminary estimate published by the Office for National Statistics showed. The growth rate matched expectations.
Traders will look to the weekly jobless claims report from the US Labor Department due out at 8.30 a.m ET. Economists expect claims to have increased to 341,000 from 334,000 in the previous week.
Simultaneously, the Commerce Department is scheduled to release its durable goods orders report for June. Economists expect durable goods order growth of 1.5 percent month-over-month in June. Excluding transportation, orders may have risen 0.6 percent.
