Oil fell as China’s export growth slowed and the International Energy Agency cut demand forecasts in signs that the global economic recovery is slowing. Prices declined 0.5 percent as China’s customs bureau reported outbound shipments in July increased 1 percent from a year earlier after an 11 percent rise in June.
Oil prices retreated 1.4% Monday as the euphoria over last week’s European Union plan faded and poor manufacturing data from the U.S. and China came into focus. Analysts said the price drop was probably inevitable after Friday’s surprising surge, which saw oil prices leap 9.4%. The move was fueled by enthusiasm over European leaders agreeing to use bailout funds to directly aid Spanish and Italian banks.
Oil traded near the highest close in two days as rising imports by Japan and speculation the Federal Reserve will add stimulus to the U.S. economy countered concern Europe’s debt crisis will derail the global recovery. Futures were little changed in New York after falling as much as 0.3 percent. Japan’s crude imports gained 7.1 percent in May from a year ago, according to data from the finance ministry.
With more fuel-efficient cars on the highways, more domestic oil being tapped, and the global price of a barrel at recent low levels, the price of a gallon of gas at the pump should logically be coming down. Right?
The numbers would suggest that’s right-thinking: The price of a barrel of oil is currently experiencing the biggest monthly decline since December 2008, selling for less than $90 and expected to drop below $80 in June—compared to an all-time high of $145 on July 3, 2008.
Brent crude held steady above $107 per barrel on Friday, but prices were headed for a third straight weekly drop as a worsening euro zone crisis and weak US economic data raised fears of a global slowdown that could dent oil demand. Worries about the euro zone, already roiled by a Greek political chaos, mounted as Spain slipped into a recession, while sluggish data out of the US sent worrisome signs about a still-fragile recovery at the world’s largest economy and top oil consumer.
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