Crude extends losses as global slowdown fans recessionary fears
Oil extended its longest losing streak in 10 months as a key measure of service-industry activity in the world’s biggest economy dropped, prompting investors to flee risky assets.
Futures sank as much as 3.1% in New York on Thursday. The Institute for Supply Management ’s non-manufacturing index dropped to the lowest since August 2016 and private American payrolls disappointed analysts and economists.
“The data was very negative,” said Ellen Wald, president of Transversal Consulting, an energy and geopolitics consultancy.
New York-traded oil futures also were under pressure amid swelling U.S. crude inventories, Wald said. Oil stockpiles rose for the third consecutive week as refiners started seasonal repairs and other work, reducing crude processing to the lowest level since March.
Saudi Arabia’s speedy recovery from crippling attacks on oil infrastructure last month also undermined prices.
“Two weeks ago, there was a sense we might go to war. But that’s been significantly relaxing as parties are indicating more interest in a dialogue,” Wald said.
West Texas Intermediate for November delivery slipped $0.63 to $52.01 a barrel at 11:09 a.m. on the New York Mercantile Exchange. The futures have fallen for eight straight sessions, the longest losing streak since early November.
Brent for December settlement dropped $0.52 to $57.17 on the ICE Futures Europe Exchange. The global benchmark crude traded at a $5.32 premium to WTI for the same month.
Meanwhile, the White House imposed tariffs on European exports including Scotch and cheese, raising concern that another trade-war front is being opened.