Investing.com - Crude oil futures fell sharply to hit a one-week low on Thursday, after the Federal Reserve said it could start scaling back its bond buying program by the end of the year, while weak Chinese manufacturing data also weighed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD96.80 a barrel during European morning trade, down 1.7% on the day.
New York-traded oil prices fell by as much as 1.9% earlier in the day to hit a session low of USD96.63 a barrel, the weakest level since June 14.
Fed Chairman Ben Bernanke said the bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.
The bank said it expects the U.S. economy to grow between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to fall to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Indications the Fed will begin to taper asset purchases sent the U.S. dollar higher across the board.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.5% to trade at a two-week high of 81.86.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Elsewhere, data on Thursday showed that China’s HSBC preliminary manufacturing purchasing managers’ index fell to a nine month low of 48.3 in June from 49.2 in May as new orders fell, indicating that the slowdown in manufacturing is worsening.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery fell 1.5% to trade at USD104.58 a barrel, with the spread between the Brent and crude contracts standing at USD7.78 a barrel.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD96.80 a barrel during European morning trade, down 1.7% on the day.
New York-traded oil prices fell by as much as 1.9% earlier in the day to hit a session low of USD96.63 a barrel, the weakest level since June 14.
Fed Chairman Ben Bernanke said the bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.
The bank said it expects the U.S. economy to grow between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to fall to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Indications the Fed will begin to taper asset purchases sent the U.S. dollar higher across the board.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.5% to trade at a two-week high of 81.86.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Elsewhere, data on Thursday showed that China’s HSBC preliminary manufacturing purchasing managers’ index fell to a nine month low of 48.3 in June from 49.2 in May as new orders fell, indicating that the slowdown in manufacturing is worsening.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery fell 1.5% to trade at USD104.58 a barrel, with the spread between the Brent and crude contracts standing at USD7.78 a barrel.