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Oil prices fell to a three-week low, falling at the same time in the area of $ 101 per barrel, helped by the weak Chinese data on the manufacturing sector, which increased concerns about weak demand. Note also that according to a report provided by HSBC Holdings Plc and Markit Economics, China PMI index for the manufacturing sector fell to 49.6 in May from 50.4 in the previous month.
Experts point out that the pressure of the oil had a statement by Bernanke, who in the course of his speech yesterday, said that the Fed could reduce the pace of bond purchases at one of its next meetings of politicians.
Note that the data for the euro area, which was published today, have had little support to oil prices. Activity in the private sector in the euro area fell again in May, which is likely to add additional arguments in favor of action by the European Central Bank and the government, aimed at stimulating economic growth. According to Markit Economics published data, preliminary composite purchasing managers' index (PMI) euro zone, the indicator of activity in services and manufacturing rose in May to 47.7 from 46.9. The total value exceeded economists' expectations, but the index is still below 50, indicating a contraction in activity. A reading above 50 indicates an increase in activity.
There were no signs that the prolonged decline in activity is close to completion. Purchasing managers reported a decrease in the volume of new orders for 22 months in a row, with the rate of decline accelerating the third consecutive month. As of the end of March, Eurozone GDP declined for six consecutive quarters, which was the longest recession in postwar history. PMI data show that the economic downturn may continue in the 2nd quarter, increasing doubts about the justification of the economic strategy of the euro zone, which in recent years has been directed at government spending cuts and tax increases to reduce budget deficits.
We also add that the drop in oil prices was due to a report released yesterday by U.S. oil reserves, which showed a significant increase in gasoline stocks.
The cost of the July futures on U.S. light crude oil WTI (Light Sweet Crude Oil) fell to 92.91 dollars a barrel on the New York Mercantile Exchange.
July futures price for North Sea Brent crude oil mixture fell $ 0.75 to $ 101.55 a barrel on the London exchange ICE Futures Europe.
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