Investing.com - Crude oil futures came under heavy selling pressure during U.S. morning trade on Thursday, after European Central Bank president Mario Draghi refrained from pledging more liquidity-boosting measures and said the economic outlook in the region was subject to “downside risks”.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD103.27 a barrel during U.S. morning trade, tumbling 1.85%.
It earlier fell by as much as 1.95% to trade at USD103.22 a barrel, the lowest since April 25.
Oil’s losses picked up speed after ECB chief Mario Draghi said that policymakers did not discuss an interest-rate cut at their monthly meeting earlier, when the bank left its benchmark interest rate unchanged at 1%, in a widely expected decision.
Draghi also refrained from pledging more liquidity boosting measures, saying that the bank’s long-term financing operations needed time to work.
According to Draghi, the economic outlook in the single currency bloc was "subject to downside risks" and that the latest data "highlight prevailing uncertainty."
He also said inflation was likely to remain in line with price stability objectives, although it was likely to stay above 2% this year.
The comments came after an auction of Spanish government debt which met with solid investor demand but saw the country’s short-term borrowing costs rise sharply.
The euro zone accounted for nearly 12% of global oil consumption in 2010, according to data from British Petroleum.
There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
A report from the U.S. Institute of Supply Management showing that service sector activity in the U.S. slowed to the lowest level in six months in April further weighed.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index declined by 2.5 points to 53.5 in April from a reading of 56.0 in March.
The disappointing data overshadowed a report from the Department of Labor showing the number of individuals filing for initial jobless benefits in U.S. fell by 27,000 last week to a seasonally adjusted 365,000, beating expectations for a decline to 380,000.
The previous week’s figure was revised up to 392,000 from 388,000.
The upbeat jobs data eased recent fears that the economic recovery in the U.S. is losing momentum, ahead of a government report on nonfarm payrolls on Friday, after government data in March showed a slowdown in hiring.
Oil traders continued to focus on the supply and demand picture in the U.S. after a U.S. government report on Wednesday showed that U.S. oil supplies rose to the highest level since September 1990 last week, underscoring fears over a slowdown in oil demand from the U.S.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery dropped 1.35% to trade at USD116.61 a barrel, with the spread between the Brent and crude contracts standing at USD13.34.
The spread between the two crudes dropped to USD12.98 yesterday, the smallest difference in more than three months.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD103.27 a barrel during U.S. morning trade, tumbling 1.85%.
It earlier fell by as much as 1.95% to trade at USD103.22 a barrel, the lowest since April 25.
Oil’s losses picked up speed after ECB chief Mario Draghi said that policymakers did not discuss an interest-rate cut at their monthly meeting earlier, when the bank left its benchmark interest rate unchanged at 1%, in a widely expected decision.
Draghi also refrained from pledging more liquidity boosting measures, saying that the bank’s long-term financing operations needed time to work.
According to Draghi, the economic outlook in the single currency bloc was "subject to downside risks" and that the latest data "highlight prevailing uncertainty."
He also said inflation was likely to remain in line with price stability objectives, although it was likely to stay above 2% this year.
The comments came after an auction of Spanish government debt which met with solid investor demand but saw the country’s short-term borrowing costs rise sharply.
The euro zone accounted for nearly 12% of global oil consumption in 2010, according to data from British Petroleum.
There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
A report from the U.S. Institute of Supply Management showing that service sector activity in the U.S. slowed to the lowest level in six months in April further weighed.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index declined by 2.5 points to 53.5 in April from a reading of 56.0 in March.
The disappointing data overshadowed a report from the Department of Labor showing the number of individuals filing for initial jobless benefits in U.S. fell by 27,000 last week to a seasonally adjusted 365,000, beating expectations for a decline to 380,000.
The previous week’s figure was revised up to 392,000 from 388,000.
The upbeat jobs data eased recent fears that the economic recovery in the U.S. is losing momentum, ahead of a government report on nonfarm payrolls on Friday, after government data in March showed a slowdown in hiring.
Oil traders continued to focus on the supply and demand picture in the U.S. after a U.S. government report on Wednesday showed that U.S. oil supplies rose to the highest level since September 1990 last week, underscoring fears over a slowdown in oil demand from the U.S.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery dropped 1.35% to trade at USD116.61 a barrel, with the spread between the Brent and crude contracts standing at USD13.34.
The spread between the two crudes dropped to USD12.98 yesterday, the smallest difference in more than three months.