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Crude oil futures tumble to 4-day low on demand concerns

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Forex Pros - Crude oil futures were down for a second day on Thursday, extending sharp losses from the previous day as concerns over a slowdown in global oil demand and a strengthening U.S. dollar weighed on prices.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at USD97.15 a barrel during European morning trade, tumbling 1.88%.

It earlier fell by as much as 2.3% to USD96.73 a barrel, the lowest price since May 6.

Crude oil prices plunged 4% on Wednesday, while Brent oil tumbled 4.7% as weaker-than-expected industrial output data from China sparked concerns that Chinese economic growth was slowing, triggering fears over a slowdown in demand for commodities.

China is the world's second largest crude oil consumer, with the International Energy Agency forecasting that China will account for approximately 40% of global oil demand growth in 2012.

Renewed strength in the U.S. dollar also weighed on prices, as the dollar index held steady near a three-week high, as fears over Greece's debt crisis weighed on the euro.

Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.

Meanwhile, government data released on Wednesday showed that total U.S. crude oil inventories rose to the highest level since May 2009 last week, indicating a slowdown in demand from the world's largest crude consumer.

U.S. crude inventories rose by 3.8 million barrels, significantly higher than the expected gain of 1.1 million barrels. Gasoline inventories increased for the first time in twelve weeks, rising by 1.3 million barrels, confounding expectations for a decline of 0.8 million barrels.

Total fuel consumption declined 0.9% to 18.2 million barrels a day, the lowest level since June 2009.

Elsewhere, on the ICE Futures Exchange, Brent oil for June delivery slumped 1.3% to trade at USD111.24 a barrel, up USD14.14 on 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.


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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