Oil Drops on Signs of Economic Slowdown

Crude oil fell to the lowest level in more than a week on speculation that slowing economic growth in the U.S. and China will crimp fuel consumption in the world’s two biggest crude users.

Futures fell as much as 3.4 percent after a Chinese services index published today fell to a record low in August. A report tomorrow may say U.S. service industries grew at the slowest pace in more than a year. Crude also declined as Exxon Mobil Corp. and Chevron Corp. returned workers to some oil and natural gas platforms after Tropical Depression Lee moved out of the Gulf of Mexico.

“There’s no impetus to break higher,” said Tobias Merath, head of commodities research at Credit Suisse AG in Zurich, who expects oil to trade in a range of $80 to $90 a barrel this month. “There has been a deterioration in the economic indicators and problems on the funding side. When you have that combination, it can be pretty nasty for the market.”

Crude for October delivery fell $2.85, or 3.3 percent, to $83.60 a barrel in electronic trading on the New York Mercantile Exchange at 2:37 p.m., after dropping as much as $2.95 to $83.50, the lowest price since Aug. 26.

For more on this Click Here