In the oil market, analysts agree that any signals about global recovery faltering will raise concerns about future oil demand.
Oil prices slid from highs above $100 a barrel after manufacturing data in China implied that the country’s economic growth may be holding up. Combined with renewed concerns about the sovereign-debt crisis in Europe, sent traders running from any assets relying on continued economic growth.
Light, sweet crude for July delivery lately traded $2.98, or 2.9%, lower at $97.13 a barrel on the New York Mercantile Exchange.
The euro fell against the dollar, which helped create a now-common feedback loop where moves in currency and commodities markets fed on each other, leading to large swings.
However, large price swings in recent weeks haven’t sent prices below $95 a barrel, a level many market observers say is an important psychological baseline. Oil futures have held between $95 and $105 a barrel since May 5, when commodities dipped across the board.
With few changes to the fundamental picture of oil supply and demand, traders comment prices could remain confined to this range until more conclusive indications appear about the pace of global growth.
