Oil falls on weak US growth prospects

31 August 2010

Crude oil prices slumped on the New York Mercantile Exchange this morning, losing as much as 1.7 per cent to trade below $74 a barrel.

The losses came after US salaries data from the Commerce Department showed incomes rose 0.2 per cent, lower than the 0.3 per cent median growth forecast predicted by 66 economists polled by Bloomberg.

Speaking to the news agency, Ben Westmore, a minerals and energy economist at National Australia Bank in Melbourne, commented: "The past couple of weeks have been clouded by talk of a double-dip recession. Until we get some macro-news that is more consistent, these markets are going to be a bit choppy."

Concerns about US growth prospects have contributed to a 6.8 per cent decline in crude prices this month, poising the commodity for its first monthly decline since May.

Heating oil was also lower this morning, with prices testing the $2-a-gallon barrier.

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