Oil prices are facing continued downside pressures amid worries over demand on Monday. The string of weak economic data in recent weeks suggested that global economy remains fragile.
On Friday, the United States showed that economy grew at an annual rate of 2.5% in this year’s first quarter, below market expectations of 3%. Disappointing reports came from China and Germany as well, triggering fears of a global economic slowdown.
“First-quarter GDP really disappointed, and as long as unemployment stays high, the U.S. Federal Reserve is going to have to keep its backstop on the economy with quantitative easing”, said Ben Taylor from CMC Markets, Sydney.
- Crude oil is trading around the $92.66 a barrel level compared with the opening at $92.77, while the highest is at $92.85 and the lowest is at $92.46
- Brent is trading around $102.71 a barrel after falling 0.44% or $0.45
Caution will prevail today, as the U.S. data may show that personal consumption weakened further in March. The Fed is expected to keep its bond buying program at $85 billion a month when it meets this week. The key non-farm payrolls report is expected on Friday.
Markets will also be focusing on China this week, as the world`s second largest oil consumer will release its manufacturing data for April. Figures are expected to have improved from the previous month, while the European Central Bank will likely cut rates when it meets on Thursday.
“Europe is in a really bad place at the moment, you get the sense that everyone has really given up on it and is focusing on other places to drive global growth”, Taylor added. The eurozone will release its confidence reports later today.
- Natural gas is trading at $4.231 per cubic feet after rising 0.19%
- Gasoline is trading at $2.819 a gallon after falling 0.56%
- Heating oil is trading at $2.8817 a gallon after falling 0.67%