Crude Oil Declines to Six-Week Low Amid Signs U.S. Recovery Is Faltering
Crude oil traded little changed near a six-week low as forecasts that U.S. home sales probably plunged in July added to concerns the economic recovery in the biggest oil-consuming nation is faltering.
Purchases of new and existing houses dropped 12 percent to a 5.01 million annual pace, the lowest since March 2009, according to the median forecast of 54 economists surveyed by Bloomberg News. Oil slipped 1.3 percent on Aug. 20, a day after the Labor Department said weekly claims for unemployment benefits climbed to the highest level since November.
“Concerns over U.S. growth weighed on oil demand sentiment,” Mark Pervan, head of commodity research at Australia and New Zealand Banking Group Ltd. in Melbourne, said in a note. “Concerns over the U.S. economy also revived risk aversion, which firmed the U.S. dollar and weakened the euro.”
Crude oil for October delivery was at $73.87 a barrel, up 5 cents, in electronic trading on the New York Mercantile Exchange at 9:27 a.m. Sydney time. The September contract fell 97 cents to $73.46 on Aug. 20, when it expired. Futures dropped 2.6 percent last week.
The dollar traded at $1.2691 a euro at 9:28 a.m. Sydney time, from $1.2712 on Aug. 20. A stronger U.S. currency limits the need of investors for commodities to hedge against inflation.
Brent crude for October settlement traded at $74.41 a barrel, up 15 cents, on the London-based ICE Futures Europe Exchange at 8:38 a.m. Sydney time. The contract dropped $1.04, or 1.4 percent, to $74.26 on Aug. 20.
