The price of crude oil was moving lower Thursday morning as traders were concerned over demand growth after the U.S. Federal Reserve disappointed markets by failing to announce new monetary stimulus measures.
Meanwhile, China's factory output shrank for an eighth straight month in June, according to a survey indicating the country's economic trough may extend well into the third quarter.
Light Sweet Crude Oil (WTI) futures for August delivery, the most actively traded contract, shed $0.76 to $80.69 a barrel. Yesterday, oil ended near a nine-month low after an official report revealed pile up of crude oil stocks in the U.S. last week. Traders also weighed the Federal Reserve move to leave its interest rate unchanged and extend the Operation Twist bond swapping program citing a slowdown in jobs.
Wednesday during trading hours, the Energy Information Administration said U.S. crude oil inventories moved up 2.90 million barrels and gasoline stocks added 0.90 million barrels in the weekended June 15. Analysts were expecting crude oil inventories to decline by 600,000 barrels last week.
This morning, the U.S. dollar was steady versus the euro and sterling after the Federal reserve left its key rates unchanged yesterday. The buck advanced to an one-month high against the yen and trading flat versus the Swiss franc.
In economic news, euro zone suffered another steep fall in private sector activity in June, which was the steepest in three years, as the fallout from the debt crisis engulfing the single-currency bloc continued to hit production and new orders. The Composite Output Index, which measures the performance of both manufacturing and service sectors, remained unchanged at 46, the lowest reading since June 2009, a survey by Markit Economics revealed. Economists had expected a decline to 45.5.
Meanwhile, U.K. retail sales recovered at a faster than expected pace in May after easing in April, the Office for National Statistics said. Retail sales volume, including automotive fuel, rose 1.4 percent from the prior month, when it was down 2.4 percent. The increase was bigger than the expected growth of 1.2 percent.
Traders will look to the weekly jobless claims data from the U.S. Labor department due out at 8.30 a.m. ET. Economists expect claims to edge down to 383,000 in the recent reporting week from 386,000 in the previous week.
Later during the session, the National Association of Realtors is scheduled to release its report on U.S. existing home sales for May. Economists estimate existing home sales of 4.57 million for the month after sales rose 3.4 percent to 4.62 million units in April.
by RTT Staff Writer
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