Investing.com - Crude oil futures were under pressure during U.S. morning trade on Monday, dropping to the lowest levels of the session following the release of a report showing that manufacturing activity in the Chicago area slowed to a 29-month low in April.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD104.08 a barrel during U.S. morning trade, slumping 0.8%.
It earlier fell by as much as 1% to trade at a session low of USD103.89 a barrel.
Oil’s losses accelerated after market research group Kingsbury International said its Chicago purchasing managers’ index fell by 6.0 points to 56.2 in April from a reading of 62.2 in March. Analysts had expected the index to decline by 1.2 points to 61.0 in April.
That was the lowest reading since November 2009. The U.S. is the world’s largest oil consuming nation and manufacturing numbers are used as indicators for future fuel demand growth.
The dismal data came after a government report said that consumer spending rose by 0.3% in March, slowing from 0.9% the previous month, while incomes rose a better-than-expected 0.4%.
The weaker-than-expected data came after Friday’s disappointing report on first-quarter U.S. economic growth, which showed the U.S. economy expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase and slower than the 3.0% pace in the prior three months.
Market participants were now shifting their focus to U.S. monthly jobs figures for April, to be released Friday.
Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world's biggest oil consumer.
A broadly stronger U.S. dollar further weighed on the precious metal, as the euro came under pressure after data released earlier confirmed that Spain’s economy slipped back in to a recession after contracting by 0.3% in the first three months of 2012.
The gloomy data came after Standard & Poor’s cut Spain’s long-term credit rating to BBB+ from A and gave it a negative outlook on Thursday, saying that the recession will undermine government efforts to reduce one of the largest budget deficits in the single currency bloc.
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.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.15% to trade at 78.89, reversing losses of as much as 0.15%.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery fell 0.45% to trade at 119.28 a barrel, with the spread between the Brent and crude contracts standing at USD15.20.
French lender Societe Generale expects Brent to average USD130 per barrel in the second half of 2012, with prices higher in the third quarter as a European Union oil embargo on Iranian crude takes effect from July 1.
The bank added that Brent's premium to New York-traded crude could narrow to USD5 per barrel in the coming months, citing the reversal of the Seaway pipeline in mid-May.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD104.08 a barrel during U.S. morning trade, slumping 0.8%.
It earlier fell by as much as 1% to trade at a session low of USD103.89 a barrel.
Oil’s losses accelerated after market research group Kingsbury International said its Chicago purchasing managers’ index fell by 6.0 points to 56.2 in April from a reading of 62.2 in March. Analysts had expected the index to decline by 1.2 points to 61.0 in April.
That was the lowest reading since November 2009. The U.S. is the world’s largest oil consuming nation and manufacturing numbers are used as indicators for future fuel demand growth.
The dismal data came after a government report said that consumer spending rose by 0.3% in March, slowing from 0.9% the previous month, while incomes rose a better-than-expected 0.4%.
The weaker-than-expected data came after Friday’s disappointing report on first-quarter U.S. economic growth, which showed the U.S. economy expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase and slower than the 3.0% pace in the prior three months.
Market participants were now shifting their focus to U.S. monthly jobs figures for April, to be released Friday.
Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world's biggest oil consumer.
A broadly stronger U.S. dollar further weighed on the precious metal, as the euro came under pressure after data released earlier confirmed that Spain’s economy slipped back in to a recession after contracting by 0.3% in the first three months of 2012.
The gloomy data came after Standard & Poor’s cut Spain’s long-term credit rating to BBB+ from A and gave it a negative outlook on Thursday, saying that the recession will undermine government efforts to reduce one of the largest budget deficits in the single currency bloc.
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.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.15% to trade at 78.89, reversing losses of as much as 0.15%.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery fell 0.45% to trade at 119.28 a barrel, with the spread between the Brent and crude contracts standing at USD15.20.
French lender Societe Generale expects Brent to average USD130 per barrel in the second half of 2012, with prices higher in the third quarter as a European Union oil embargo on Iranian crude takes effect from July 1.
The bank added that Brent's premium to New York-traded crude could narrow to USD5 per barrel in the coming months, citing the reversal of the Seaway pipeline in mid-May.