Oil investments in the red, as German bonds auction does not deliver
Crude oil futures furthered their declines on the commodity index today, amid increasingly alarming signs of economic weakening in the euro zone. Germany and its recent disappointing bonds sales were the latest to come under trader scrutiny in a region that has been continually riddled with debt for the past two years. Worse than expected financial data stemming from the two largest economies in the world, China and the U.S., also affected oil investments.
Despite the fact that the U.S. Energy Department announced more than 6 million barrels worth of drops in the nation’s crude storage hub in Cushing, Oklahoma, investors concentrated their attention on the dismal economic showings on a global scale.
West Texas Intermediate crude oil futures for delivery in January fell $1.84 to settle at $96.17 per barrel in electronic trading on the New York Mercantile Exchange. Oil investments in the American contract saw early gains due to Cushing reports, yet faltered for the remainder of the session, as low durable goods orders and higher jobless claims weighed down the economy.
The commodities market spent the bulk of the day in the red, as early signs of weak bonds sales in Germany infused the sector with pessimism. The prolific nation is the sole remaining point of support for the floundering euro zone, and any cracks in its economic foundation will likely cause another round of sharp declines on the commodity prices charts. Germany received only 4 billion euros in return for its bonds, a steep undersell when compared to the country’s initial earning plan of 6 million euros.
Oil investments suffered yet another hit on the charts when China’s government announced that it will brace itself for a recession-type market, effectively cutting back on raw material demand and general spending, focusing their attention on domestic austerity for the time being.