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Oil Continues to Tumble in Asian Trade on Bleak Data
August 12, 2010

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Oil prices sank further in Asian trade on Thursday as a slew of negative economic data worldwide ignited concerns over the fragile state of the global economic recovery, analysts said.

New York’s main contract, light sweet crude for delivery in September, shed 45 cents to $77.57 a barrel in the afternoon.

Brent North Sea crude for September retreated 55 cents to $77.09.

“Global economic concerns are pulling down crude prices,” said Victor Shum, from energy consultants Purvin and Gertz.

“Quite a bit of bad news is coming out from Europe, Asia and the United States."

“The Chinese economy is starting to show signs of weakness and the United States Federal Bank announced that the pace of the economic recovery is becoming more gradual.”

The Fed had said in a statement issued on Tuesday that US growth “has slowed in recent months. The pace of economic recovery is likely to be more modest in the near term than had been anticipated.”

A Bank of England downgrade of its outlook for growth in Britain also dragged on sentiment, Shum said.

The British central bank on Wednesday forecast in a quarterly report that GDP growth would average about 3 percent over the next three years.

That was lower than the previous estimate of between 3 percent and 4 percent in May, owing partly to the impact of the government’s recent austerity budget that aimed to slash the public deficit.

“We are seeing, therefore, oil continuing the downward trend from yesterday,” Shum said. 


Agence France-Presse