Oil prices slide on bearish data

Oil prices slid on Wednesday (September 2nd) as US stockpiles rose more than expected and weak manufacturing data from the world’s largest economy weighed on sentiment.

West Texas Intermediate for delivery in October slipped 2.5 per cent to $44.28 a barrel on the New York Mercantile Exchange, while Brent was down 1.75 per cent at $48.71 on the ICE Futures Exchange in London.

Brent and US crude both shed about eight per cent on Tuesday after rallying 25 per cent over the previous three sessions.

It was the biggest three-day rise for crude prices since 1990, but came to a halt as risk appetite ebbed away following weak manufacturing data first from China and then from the US.

The Institute for Supply Management reported that US manufacturing growth in August slowed to its lowest level since May 2013. An earlier report had already shown Chinese factory activity contracted at the fastest pace in three years.

Figures from the American Petroleum Institute showed US crude stocks increasing by 7.6 million barrels to 456.9 million last week. The US Energy Information Administration will release its weekly report on oil supplies later on Wednesday.

Equities were treading water in Europe, with the FTSE 100 and DAX little changed after Tuesday’s falls.

Asian shares had fallen overnight, dropping for the third straight day on global growth fears.

US stocks also dropped, with the three major indices all more than 2.8 per cent lower.

The Dow Jones Industrial Average closed at 16,058.35, down 469.58 points, while the S&P 500 ended a rocky day down 58.31 points at 1913.87. The tech-focused Nasdaq closed at 4,636.10, down 140.40 points.

The US dollar rose against its major peers, with the dollar index up 0.35 per cent. Sterling held near a three-month low against the greenback, while the yen slid 0.5 per cent. EUR/USD shed 0.5 per cent to trade at 1.1264.