Global Fears Lead to Less Demand for Crude Oil

Sam Fletcher

OGJ Senior Writer

HOUSTON, July 11 — Oil prices dropped July 8 following a discouraging employment report that agitated market fears of a stalled economy. Prices for crude contracts fell on the New York market, wiping out the previous session’s gains that were based on better-than-expected private-sector job data and strong retail sales (OGJ Online, July 7, 2011).

Standard & Poor’s 500 index posted a 1% loss, “which marked the first negative day since June 24,” said analysts in the Houston office of Raymond James & Associates Inc. “The economy added a paltry 18,000 jobs in June after a downwardly revised 25,000 estimate in May. The Oil Service Index and [SIG Oil Exploration & Production Index] EPX followed the broader market with a decline of 1%. Earnings [reports] from many bellwether companies are set for this week, but all eyes remain on global macrofundamentals, including China, which reported a multiyear inflation high July 10.”

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