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Crude drops amid ongoing Cyprus worries, disappointing European data

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Investing.com - Oil prices fell in U.S. trading on Thursday after data revealed that Europe's factories were producing less than expected this month.

Ongoing uncertainties as to how Cyprus will tap bailout money and cool a reheating eurozone crisis also sent investors avoiding oil, a growth-sensitive economy.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded down 1.49% at USD92.11 a barrel on Thursday, off from a session high of USD93.50 and up from an earlier session low of USD91.85.

The eurozone's manufacturing purchasing managers' index hit a three-month low of 46.6 in March from 47.9 in February, defying expectations for a gain to 48.2, according to London-based Markit Economics.

The eurozone services PMI, meanwhile, dropped to a five-month low of 46.5 in March from 47.9 in February, also defying expectations for a gain to 48.2, Markit added.

Markit also reported that Germany's manufacturing PMI fell to 48.9 in March from 50.3 the previous month, missing market calls for a 50.5 reading while the country's service-sector expanded at the slowest rate in four months.

The French manufacturing PMI came in at 43.9 in March, unchanged from February's reading, while service sector activity in France fell to a 49-month low of 41.9.

Meanwhile in the U.S., fewer people filed for initial jobless claims last week than the week before.

The number sent oil prices dropping amid fears Europe will demand less energy and fewer fuels than once thought, especially if the crisis in Cyprus heats up, roils markets and cools growth.

The Cypriot parliament rejected a E.U. proposal to slap taxes on bank deposits, though the country must still find ways to raise EUR5.8 billion if it wishes to tap a EUR10 billion financial assistance package arranged by its European neighbors and the International Monetary Fund

A bank holiday remains in effect until Monday, which gives European policymakers more time to find a way out of the crisis, though energy prices suffered due to the uncertainty.

Elsewhere on the ICE Futures Exchange, Brent oil futures for May delivery were down 1.26% at USD107.34 a barrel, up USD15.23 from its U.S. counterpart.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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