NEW YORK: Oil slid more than 3 percent to below $100 a barrel as soft economic data from China and the US and a record level of US crude oil stocks darkened the outlook for global demand.
Brent crude futures were down $3.03 to $ 99.34 a barrel by 1615 GMT, and dipped below $ 99 for the first time since April 23.
The contract slid 7 percent in April, its biggest monthly drop in 11 months, on the back of indicators suggesting the global economy remains in a fragile state.
Crude stocks in the US rose by 6.7 million barrels last week to their highest level on record at 395.3 million barrels, data from the Energy Information Administration showed, far exceeding forecasts of a 1 million barrel build and further pressuring US oil prices.
US oil was down $3.00 at $90.46 a barrel, falling through its 50-day, 100-day, and 200-day moving average, key technical indicators watched by traders.
Tim Evans, energy specialist at Citi Futures Perspective in New York, said he believed US oil was still relatively expensive given current supply and demand dynamics, citing $ 80 to $ 85 prices as making “more sense” to him. “Do you want to get the ‘glut’ word out? If not now, then when?” he asked.
“These are the highest crude stocks ever. Weíre not running out of the stuff.”
Growth in China’s manufacturing sector unexpectedly slowed in April as new export orders fell, raising fresh doubts about the strength of the economy after a disappointing first quarter.
“China’s manufacturing data was a big miss, and obviously when China speaks, we listen,” said Richard Ilczyszyn, chief market strategist and founder of iitrader.com LLC in Chicago.
In the US, the pace of manufacturing growth slowed in April as the sector expanded only modestly, an industry report showed, adding to signs the economy cooled as the second quarter got underway.
Figures on private-sector jobs growth also came below market expectations, two days before the government’s closely watched non-farm payrolls data.
A two-day Federal Reserve committee meeting was set to wrap up and the Fed was widely expected to maintain its stimulus policy to support an economic recovery that is still too weak for the job market to truly heal.
