Oil fell to around $64 a barrel today and touched a five-week low, pressured by doubts over the prospects for a recovery in the global economy and energy demand.
The US jobless rate reached a 26-year high and Euro zone unemployment is at the highest in a decade, reports showed last week. Oil fell even after militants attacked oil installations in major African exporter Nigeria.
“There's a general retreat caused by lack of risk appetite,” said Mike Wittner, oil analyst at Societe Generale. “For a couple of months, we perhaps got a bit too optimistic and several markets got ahead of themselves.”
US crude fell $2.88 from Thursday's close to $63.85 a barrel by 1.14pm. It traded as low as $63.40, the lowest intraday price since May 28th. Brent crude fell $1.85 from Friday's close to $63.76.
European stocks weakened today following on from losses in Asia. US stock futures pointed to a lower opening on Wall Street. The dollar rose against a basket of other major currencies.
“It's a definite break to the downside, probably sparked by the poor economic data and stalling stock markets,” said Christopher Bellew, a broker at Bache Commodities in London.
“It's completely broken through its support at around $68.00-$68.50 and technically and probably fundamentally, heading lower now," he added, referring to Brent crude.
NYMEX floor trading was closed on Friday because of the US Independence Day holiday and, although oil traded electronically, the exchange did not issue an official closing price.
Reuters