Oil prices plummeted on Thursday, hammered by a batch of weak economic data on the United States and China, the world's two biggest energy consumers.
New York's main contract, light sweet crude for delivery in August, slumped closed 2.68 dollars lower at 72.95 dollars a barrel.
In London, Brent North Sea crude for August sank 2.67 dollars to settle at 72.34 dollars a barrel.
"All the bad economic news… leads to the perception that petroleum-product demand growth is going to slow down quite a bit in the next couple of months, especially when people were counting on growth in Asia," said Andy Lipow of Lipow Oil Associates.
Oil prices began the day under pressure after separate surveys on Thursday showed growth in manufacturing activity in China slowed in June.
The HSBC China Manufacturing PMI, or purchasing managers index, fell to 50.4 last month from 52.7 in May, the bank said.
A Chinese government agency said its PMI fell to 52.1 from 53.9 the previous month.
A 50 reading is the breakeven point between growth and contraction.
The market expects China's booming economy to lead growth in energy demand over the next decade.
The United States, the world's largest energy consumer, provided a drumbeat of bad indicators that further rattled market sentiment.
The US manufacturing sector, which has been driving the almost year-old fragile economic recovery from recession, grew for the 11th straight month in June but at a slower pace than expected, an industry survey showed.
The Institute of Supply Management (ISM) said its PMI slipped to 56.2 percent from 59.7 percent in May.
New claims for US unemployment benefits jumped more than expected last week, official data showed Thursday on the eve of the key June jobs report.
And pending US home sales plunged 30 percent in May after the expiration of an April 30 tax-credit deadline, more than twice as much as analysts expected.
"Although some of the price volatility could be attributed to oil market dynamics," said Jason Schenker of Prestige Economics, the moves lower largely have been tied to "a broader market" unease.
The market appeared to shrug off a sharp rise by the euro against the dollar, of more than two cents, and easing losses on US equity markets.
"Once oil started getting sold off and broke through some support level you had a fair amount of liquidation," said Lipow.
"When people try to raise cash for other investments it's easy to get rid of commodities," he added.
Concerns eased about a large storm in the Gulf of Mexico, home to about a third of US crude oil production and the site of the BP oil-spill disaster.
Alex, the first hurricane of the Atlantic hurricane season, was downgraded to a tropical storm Thursday as it moved inland in Mexico.
The storm did "little damage to any Gulf of Mexico facilities or refineries in the Corpus Christi area," an industry hub on the Texas coast, Lipow said.
Share This Article With Planet Earth
