China and Europe report slow recovery, oil investment retreats

Crude oil futures posted yet another round of declines on the commodity index today, as sovereign debt in the euro zone continued to weigh down on the consciousness of traders and economists. Despite some minor optimism coming in from increased consumer confidence in the US, China’s disappointing dip in demand kept oil investment down for the day.

The economic and political woes of Europe continued to rein the sector’s sentiment. Greece’s protracted inability to form a coalition government kept a lid on crude oil futures and oil investment in general. Spain’s return into a recession added to the negative pressure on the fuel, while France’s new Socialist state dashed any hope traders had of a continuous line of austerity in the nation.

In addition to the old and new fears stemming out Europe, China’s first decline in demand in three years rattled the confidence of investors. The prolific nation reported its slowest growth in industrial production since the year 2009, prompting a general slowdown in expansion, which then caused a slide in building material commodities.

OPEC’s plans of increased production as a way to fight rising prices also forced traders to reconsider investing in oil.

The commodity’s losses were somewhat limited by reports out of the US, which stated that consumer confidence was at its highest in more than nine months.

West Texas Intermediate crude for June delivery fell 95 cents to a per barrel oil price of $96.13 in New York markets, while Brent prices for June settlement declined 42 cents and settled at $112.21 per barrel in London.

By: Chris Termeer