Crude oil prices fell today over mounting concerns that the United States,one of the world’s largest consumer of crude oil, is heading for a slowdown. Recent economic data indicate sluggish growth, decline in manufacturing, and today’s personal spending data also fell.
Meanwhile, ratings agencies have threatened to downgrade the U.S. top notch AAA rating.
Investors only briefly found euphoria after the news that a deal was finally reached on a $2.1 trillion deficit-cutting plan, which is to be approved in the U.S. Senate later today.
On Monday U.S. crude fell to $93.44, its lowest since June 29, on news that U.S. manufacturing expanded at its weakest pace in two years. In July, ISM manufacturing PMI only increased less than expected by 50.9, less than the 55.0 forecasted, and less than June’s 55.3 figure.
Today, U.S. personal spending data indicated American consumers spent less in June. This news sent crude oil down again to $93.75.
Analysts do not expect a relief rally in oil and commodity markets despite the last-minute deal, as U.S. and European debt problems continue to loom large.