Oil Prices Drop on China Manufacturing Slowdown and Fed Comments

U.S. crude-oil futures slid on Thursday, as the market grappled with weak manufacturing-activity figures from China, an increase in U.S. oil supply and signals from the Federal Reserve that a reduction in monetary stimulus is in sight.

Crude for July delivery CLN3 -2.79% lost $2.54, or 2.5%, to $95.70 a barrel.

Further risk aversion on Thursday in North American trade and a surge in the U.S. dollar have created “a perfect storm of bearishness” for crude-oil futures, said Matt Smith, a commodity analyst at Schneider Electric.

U.S. jobless claims for the week ended June 15 rose by 18,000 to a seasonally adjusted 354,000, more than expectations of a rise to 340,000. The weaker-than-expected claims data gave more credence for the oil selloff, said Smith. “I think the jobless claims were really the cherry on top of things,” he said.

via Marketwatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza