Oil prices lower on US economic data

Wednesday 23 January 2013 08.20
Oil prices lower on US economic concerns
Oil prices lower on US economic concerns

The price of oil fell today after monthly home sales and manufacturing data raised concerns about the US economy's growth prospects.

Benchmark oil for March delivery was down 13 cents to $96.55 a barrel in electronic trading on the New York Mercantile Exchange.

The February contract, which expired yesterday, rose 68 cents to close at $96.24, a four-month high.

Brent crude, used to price international varieties of oil, was down 26 cents to $112.16 a barrel on the ICE Futures exchange in London.

A drop in US sales of previously occupied homes for December from November hurt sentiment, as did a report by the Federal Reserve Bank of Richmond showing a drop in manufacturing in the central Atlantic region.

Analysts said the reports raised concerns about the US manufacturing sector once again. A downturn in factory production would likely reduce demand for energy and cause prices to fall. Ample supplies of oil and petrol are also weighing on prices.

There also remains some uncertainty about the outcome of negotiations in Washington on the US debt limit. Congress is set to vote later in the day on a measure to raise the country's borrowing limit. Otherwise it could face an economically calamitous, first-ever default.

Keywords: oil, brent