Oil dips as weak euro zone business activity compounds demand worries
Business
Oil dips as weak euro zone business activity compounds demand worries
HOUSTON (Reuters) - Oil prices eased more than $1 on Monday as disappointing euro zone business activity added to worries about weak demand.
Euro zone business activity contracted sharply and unexpectedly this month as the bloc's dominant services industry flatlined while a downturn in manufacturing accelerated.
US business activity was steady in September, but average prices charged for goods and services rose at the fastest pace in six months, potentially hinting at a pickup in inflation in the coming months.
China, the world's top oil importer, is meanwhile battling deflationary pressures, and struggling to lift growth despite a series of policy measures aimed at spurring domestic spending.
"Disappointing economic numbers flowing from China along with a surprise slowdown in European manufacturing is placing crude demand at the lowest levels so far this year," said Dennis Kissler, senior vice president of trading at BOK Financial.
Supply concerns stemming from Israel's airstrikes on Hezbollah targets on Monday helped support oil prices.
After almost a year of war in Gaza, Israel is shifting its focus to its northern border, across which Hezbollah has been firing rockets in support of its ally Hamas.
"More attacks from Israel on Lebanon spawn fear that Iran will become more involved, which raises the probability of oil exports being at risk," Kissler added.
