Oil down in Asia on weak US data
SINGAPORE— Oil was down in Asia on Monday as weak economic data from the United States sparked concerns over a softer demand for crude, analysts said.
New York’s main contract, light sweet crude for delivery in June dropped 48 cents to $92.52 a barrel and Brent North Sea crude for June delivery shed 48 cents to $102.68.
“The weak (US) GDP data questions business conditions in the market, signalling that inventories may rise as demand softens,” said Desmond Chua, market analyst at CMC Markets in Singapore.
A rise in US crude inventories signals weak demand in the world’s biggest economy and oil consumer and puts a downward pressure on prices.
The US economy grew at a pace of 2.5 percent in the first quarter of 2013, below the average analyst forecast of 2.8 percent, the Commerce Department said Friday, with cuts in government spending offsetting private consumption and investment gains.
Federal government spending, hit by the “sequester” budget cuts, continued to drag on the economy.
The $85 billion across-the-board spending cuts over seven months officially came into effect on March 1, with the aim of rapidly paring the country’s large deficit.
But agencies were already pulling back during the final months of 2012 in preparation, a key reason for the near-stall in the economy during that period.