Markets

Oil falls amid demand concerns

By Christian Schmollinger and Ben Sharples (China Daily)
Updated: 2010-07-01 11:19

The measure of China's economy compiled by the New York-based Conference Board rose 0.3 percent in April, less than the 1.7 percent gain it reported June 15. The research group corrected the outlook after a "calculation error" for total floor space on which construction began.

"Crude has been shellacked due to confidence around the world eroding," said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. "The revision in confidence was a concern."

The Conference Board reported its US confidence index slumped to 52.9 in June from a revised 62.7 in May, as Americans became pessimistic about the outlook for the labor market and the economy. The median forecast of 71 economists' estimates in the Bloomberg survey called for a decline to 62.5.

Related readings:  Sinopec to increase oil processing at Maoming refinery  Economy likely to maintain steady, rapid growth: PBOC  China's refining capacity may rise 50%, Sinopec says

Asian equities fell for a second day, extending a global rout after the Standard & Poor's 500 Index dropped to its lowest level since October.

The MSCI Asia Pacific Index declined 1.4 percent to 112.42 as of 2:08 pm in Tokyo.

Oil also dropped on predictions Hurricane Alex, moving west across the southern Gulf of Mexico, will miss production areas.

US crude inventories declined 3.4 million barrels in the week ended June 25, according to a report on Tuesday from the industry-funded American Petroleum Institute (API).

Bloomberg News