Current Crude Oil Prices Drop to $93
Current crude oil prices dropped close to $93 per barrel after a fall showed a decline in China’s manufacturing activity to its lowest rate in seven months, an indication that the country’s economic recovery is weakening.
On the NYMEX, the U.S. benchmark crude for delivery in July was 99 cents lower to $93.29 per barrel. The contract shed $1.90 to settle at a crude price per barrel of $94.28 during the previous trading day.
The initial version of HSBC Corp.’s monthly PMI showed that the index declined from April’s 50.4 to 49.6 in May. Figures lower than 50 signify contraction. The prices of oil fell since a downturn in China may possibly cause a drop in crude demand.
Moreover, the price of oil was struggling as world markets soured on indications that the U.S. Fed may gradually tighten its financial policy. The recent equity markets in Asia and Europe posted huge losses, including a fall of 7.3 percent on the Nikkei 225 index of shares of Tokyo.
Sufficient inventories of crude and refined commodities like gasoline also pulled prices down even if short term demand was anticipated to rise.
On London’s ICE Futures Exchange, Brent, the benchmark used to assign prices for many international oil blends, was 82 cents lower to $101.78 per barrel.
In other NYMEX trading, the price of wholesale gasoline moved 1.01 cent lower to $2.8021 per gallon. The price of heating oil moved 1.49 cent lower to $2.8538 per gallon. The price of natural gas moved 0.8 cent down to $4.178 per thousand cubic feet.