Oil prices fell today, extending the worst loss in 13 months in January on concerns about global growth and sluggish oil demand.
Fresh economic data out of China, the world's second-largest energy consumer, heightened concerns that Beijing would further tighten monetary policy.
An official purchasing managers index remained firmly in expansionary territory, while a companion poll by HSBC scaled an all-time high - with both reports showing evidence of a further increase in cost pressures.
US crude for March delivery fell 24 cents to $72.65 a barrel by 5.24am. London Brent crude fell 26 cents to $71.20.
Oil prices ended January down more than 8 per cent, pressured by data showing tepid energy demand in the United States, worries about fiscal turmoil in smaller euro zone countries and a stronger US dollar.
Money managers cut their net long crude oil futures position on the New York Mercantile Exchange in the week through January 26th, the Commodity Futures Trading Commission said on Friday.
While the economic data from China showed a strong manufacturing sector, Beijing's moves last month to rein in rapid growth and curb inflationary pressures have sparked fears that such measures could impede a still-weak global economic recovery and curb Chinese demand for energy and commodities.
Adding to the gloom, the White House will predict a $1.6 trillion US budget deficit in the 2010 fiscal year, a fresh record and the biggest since World War Two as a share of the economy, a congressional source said yesterday.
Markets are also bracing for other economic news this week, with a number of major central bank meetings across the world and a raft of economic reports out of the United States, culminating in non-farm payrolls data on Friday.
A key US January manufacturing report later today is expected to give a reading of 55.2, showing an expanding sector for the sixth straight month.
Asian stocks slid today after suffering their worst monthly drop in a year, while the US dollar gathered steam, as fiscal worries in the euro zone prompted investors to add to short positions in the single currency.
Royal Dutch Shell has shut down three oil flow stations in Nigeria's Niger Delta after a key crude oil pipeline was sabotaged, the company said yesterday.
Reuters