Oil drops 2% as weak manufacturing data feed on slowdown worries

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Oil drops 2% as weak manufacturing data feed on slowdown worries

On Tuesday, the 3rd of September 2019, both US and Brent crude futures’ prices were jolted more than 2 per cent after softer manufacturing activity across the globe raised alarms of a global scale recession risk with a majority of economic superpowers’ including China, Japan and Germany alongside euro zone, factory activity had already been facing off a technical recession, while service sectors were still clinging on to hopes of a robust fiscal stimulus.

While a ratcheting up of trade tensions between Washington and Beijing had been weighing on to investors’ confidence, both US and UK crude opened Tuesday’s (September 3rd) market in an offbeat note, but both crude futures’ prices extended losses after release of US manufacturing data displaying its first contraction in more than three years.

Earlier on Tuesday (Sept. 3rd), separate euro zone data had revealed that the bloc’s manufacturing activity was contracted for seven straight months in August in a row. Facing off a double whammy on crumbling factory data in the United States alongside euro zone, on Tuesday’s (Sept.

3rd) market closure, US West Texas Intermediate Crude shed 2.1 per cent to wrap up the day at $53.94 a barrel after hitting an intra-day low of $52.84 per barrel, its lowest level since August 9th, while UK crude shrugged off 0.7 per cent to round off the day at $58.26 per barrel after dipping in to a session low of $57.23 per barrel, its weakest level since August 9th.

Meanwhile, addressing to a growing possibility of further downswing ahead of crude oil futures’ prices given the extent of a tempestuous demand outlook, a partner at Again Capital in New York, John Kilduff said, “That deterioration is continuing to undermine the demand growth outlook for oil. ”