Home Business News Oil continues to decline today, pressured by contraction in factory activities in the Eurozone

Oil continues to decline today, pressured by contraction in factory activities in the Eurozone

21st Mar 24 1:13 pm

Crude oil continues to decline across both major standards for the second day, after reaching its highest levels since last November earlier this week, with a decline of about 0.5% at approximately 10:30 a.m. GMT.

The decline in oil prices today came with the return of a faster than expected acceleration in the contraction of manufacturing activities in one of the largest crude importing regions in the world, the Eurozone, led by Germany and France.

While the performance of manufacturing activities in the United Kingdom, which barely stopped its contraction for the first time in about two years, was unable to support the decline in oil prices.

Today, we witnessed the preliminary PMI reading for the month of March, which reaffirmed the continuation of the contraction extending since mid-2022 in factory activities in Germany, France, and the Eurozone as whole, in light of weak demand despite the continued rise in confidence about the coming months, according to S&P Global.

These disappointing data from the Eurozone come after positive data earlier this week for Chinese industrial production in February, which grew significantly more than expected.

It also seems that the energy markets finally ignored the positive signals given by the Federal Reserve Chairman in his speech yesterday after announcing the interest rate decision, when he talked about the possibility of cutting the interest rate three times this year, starting in the second half.

In addition, these continued declines since yesterday come despite the continuation of withdrawals from US inventories for the second week in a row and in a larger than expected manner for the first time since January.

Today, the markets are also awaiting the preliminary reading of the US S&P Global PMI, with expectations of a slowdown in the growth of both services and manufacturing activities.

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