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Oil tumbled the most in almost a month as European Central Bank President Mario Draghi said the euro area’s economic outlook has become “more uncertain.”
Prices dropped as much as 2.4 percent as Draghi said the region’s economic forecast is subject to downside risks, though the ECB still expects a gradual recovery this year. The central bank held its benchmark interest rate at a record low of 1 percent. Austerity measures aimed at stemming the debt crisis have pushed economies from the Netherlands to Spain back into recession. The ECB may be unwilling to add to stimulus as it presses governments to enact reforms and take responsibility for the crisis.
Oil’s loss accelerated after data showed U.S. service industries expanded at a slower pace than projected in April.
The Institute for Supply Management’s non-manufacturing index for the U.S. fell to a four-month low of 53.5 in April from 56 in March, the Tempe, Arizona-based group’s data showed today. The median forecast of 74 economists called for a decrease to 55.3. Readings above 50 signal expansion.
Crude for June delivery touched $102.65 in the biggest intraday drop since April 4 on the New York Mercantile Exchange. Prices have fallen 7.4 percent in the past year.
Brent oil for June settlement fell $1.73, or 1.5 percent, to $116.47 a barrel on the London-based ICE Futures Europe exchange.
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