Euro zone business activity unexpectedly contracted sharply this month as key services sectors stalled and manufacturing’s decline accelerated.
Oil prices fell on Monday as disappointing business activity in the euro zone raised concerns about weaker demand.
Brent crude futures for November delivery fell 59 cents, or 0.8 percent, to $73.90 a barrel, while U.S. West Texas Intermediate (WTI) crude oil for November delivery fell 63 cents, or 0.9 percent, to $70.37 a barrel.
The sharp contraction in euro zone business activity this month was driven by a slump in the key services sector and a sharp decline in manufacturing.
Meanwhile, U.S. business activity remained stable in September, while average prices for goods and services rose at the fastest pace in six months, potentially signaling a pick-up in inflation in coming months.
USOIL
China, the world’s biggest oil importer, has struggled to boost weak growth and continues to face deflationary pressures despite a series of policy measures aimed at stimulating domestic spending.
Disappointing economic data from China and an unexpected slowdown in European manufacturing have pushed oil demand to its lowest level this year.
On the supply side, oil prices received some support due to concerns over Israeli airstrikes targeting Hezbollah on Monday.
Additionally, a tropical disturbance off the Gulf of Mexico is threatening oil production, and Shell said Sunday it was halting production at its Stones and Appomattox facilities in the region as a precautionary measure.
Both oil benchmarks rose more than 4% last week following the Federal Reserve’s decision to cut interest rates by 50 basis points.
