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Oil prices fell sharply, losing in the course of trade of more than $ 2 a barrel, and reached one-week low near $ 103, which was due to pressure from the Chinese data, as well as statements by the U.S. Federal Reserve in reducing the size of the program to purchase assets.
Note that the results of preliminary studies that were presented today Markit Economics and HSBC, have shown that in June, China's manufacturing activity continued to shrink, thus accelerating its pace, which reduces the prospects for sustainable economic recovery.
According to the report, this month the manufacturing purchasing managers' index fell to 48.3, compared with a final reading in May at 49.2. It is worth noting that the index is now at its lowest level in nine months. Recall that the value of this indicator is below 50 suggests contraction in activity in the sector. In addition, the data showed that the volume of new orders and new export orders fell in June at a faster pace.
Studies have also found that the production index for the manufacturing sector fell in June to the level of 48.8 from 50.7, while reaching the lowest level in eight months. Add that employment in this sector has also declined at a faster pace. Meanwhile, the rate of decline has slowed in purchase prices and selling prices for the products continued a downward trend, with the rate accelerating its fall compared to the previous month.
The Chinese authorities have indicated that they tolerate the growth slowdown to give more opportunities for reforms that could be good for the economy in the long term.
Oil is also lost in the price after Federal Reserve Chairman Ben Bernanke said the U.S. economy is growing fast enough to start slowing down the pace of bond purchases this year.
Prices also took a hit from an amazing increase in oil inventories in the U.S., even though the height of the summer driving season, when demand for gasoline increases. Add that inventories rose by more than 300,000 barrels, in contrast to the predictions of experts at -500,000 barrel.
However, it is worth noting that the oil can not fall much further from current levels due to concerns over supply disruptions from the Middle East, where about one third of world production.
The cost of the July futures on U.S. light crude oil WTI (Light Sweet Crude Oil) fell to 95.40 dollars a barrel on the New York Mercantile Exchange.
July futures price for North Sea Brent crude oil mixture fell by $ 2.84 to $ 102.84 a barrel on the London exchange ICE Futures Europe.
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