Oil slips on more signs of slowing economy

Mon Jul 2, 2012 4:47pm EDT
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By Robert Gibbons

NEW YORK (Reuters) - Oil prices edged lower on Monday as weak manufacturing data from the United States, Europe and China reinforced concerns about slowing economic growth and its threat to demand for petroleum.

Ongoing fears about the euro zone's debt crisis helped pressure oil as enthusiasm for a European Union (EU) bank bailout deal faded after the agreement helped push crude prices on Friday to their fourth-biggest daily gain on record.

Trading was choppy and both Brent and U.S. crude futures settled well above their intraday lows as Middle East tensions and a strike by Norwegian oil workers supported oil prices.

News that Iranian lawmakers had drafted a bill calling for Iran to shut off the Strait of Hormuz to oil tanker traffic helped limit oil's losses, especially for Brent crude.

"The market is jittery, with U.S. crude falling to (an initial intraday) low after the ISM data (U.S. factory activity) added to the concerns about manufacturing slowing down, but the news from Iran showed how much uncertainty there is about that situation," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.

Brent August crude dipped 46 cents to settle at $97.34 a barrel, having managed a recovery from a $95.30 low.

U.S. August crude fell $1.21 to settle at $83.75 a barrel, having slumped to $82.10 intraday.

On Friday, Brent rose more than $6 a barrel while U.S. crude jumped more than $7, their fourth-largest daily gains in dollar terms since the contracts were launched.   Continued...

An employee fuels a motorcycle at a SK Energy gas station in central Seoul June 26, 2012. REUTERS/Woohae Cho