Crude tumbles to $124 per barrel, on weak US economic reports

www.chinaview.cn 2008-08-01 03:56:26

NEW YORK, July 31 (Xinhua) --

Crude oil resumed sharp falling Thursday after the latest disappointing U.S. economic data exacerbated concerns about the flagging fuel demand.

Light, sweet crude for September dropped 2.69 U.S. dollars to settle at 124.08 dollars on the New York Mercantile Exchange.

Futures surged to 127.89 dollars a barrel in the early morning trading as the dollar lost against the euro. But with the release of raft reports showing that the U.S. economy remains weak, the price took a dive and hit as low as 122.71 dollars a barrel.

The U.S. Commerce Department reported Thursday that the second quarter gross domestic product (GDP) growth rate, which reflects the value of all goods and services produced in the United States, was 1.9 percent, much lower than the economists previously forecast.

Even worse is the number of initial jobless claims last week surprisingly jumped to 448,000, the highest level in five years, the U.S. Labor Department reported. Economists had predicted it to decline slightly.

Investors are concerned that weak economic conditions would curb fuel demand. The worry was backed by the U.S. Energy Department data which shows that the U.S. domestic fuel consumption averaged 20.7 barrels a day in the past 12 months, the lowest for the period since 2004-2005.

Crude oil prices have slid more than 23 dollars a barrel from the record 147.27 dollars a barrel achieved on July 11.

In London, Brent crude for September delivery tumbled 3.12 dollars to settle at 123.98 dollars on the ICE Futures Exchange.

Editor: Yan Liang

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