On Friday, oil futures fell yet again on news of slow manufacturing in China, low consumer spending in the U.S., and poor retail sales in Germany, reported the Los Angeles Times.
And with this drop, the article reports, it’s shaping up to be one of the biggest quarterly price drops since 2008, the year of the financial crisis.
According to the LA Times, China saw a drop in manufacturing for the third consecutive month, the longest this has occurred in nearly two years.
In Germany, retail sales have fallen 2.9% from July, when they saw a small increase.
And in the U.S., consumer spending slowed down.
The cause of this slowdown? As the U.S. Commerce Department announced on Friday, the average American income fell 0.1% in August.
This is the first time average income has fallen in almost two years.
And as a result, oil demand is not expected to rise anytime soon. After all, the U.S. is the world’s largest consumer of oil, with China following closely behind.
These strokes of bad news shook up oil futures on Friday morning, reported the Wall Street Journal.
Light, sweet crude for November delivery, it reports, fell to $80.50 a barrel on Friday morning on the New York Mercantile Exchange.
And Brent crude for November delivery fell to $102.15, a dip of 1.6%, on the London-based ICE Futures.
The LA Times reported that prices for light, sweet crude have fallen a total of 15% since the start of the third quarter.
That big of a drop hasn’t occurred since 2008.
And just in the month of September, prices for crude are down about 8.6%, reports the article.
Prices for Brent crude are down 9.9% this month and 8% total this quarter.
Michael Lynch of Strategic Energy & Economic Research gave the LA Times his view on the situation:
“The underlying message is that the economy will remain weak in the long term. In the short term, the market is going to react on every headline out of Europe on the debt crisis and every bit of economic data here in the U.S.”
What we really need now is some positive European debt crisis and U.S. economic news to turn this all around.
That’s all for now,