Oil on the Nymex fell to US$91.3 for November, while Brent November crude futures fell to US$110, ending Tuesday below two critical technical levels -- the 50-day moving average at US$112.06 and the 200-day moving average at US$112.09. Weak data from Europe and China dimmed the outlook for demand, while Europe’s festering debt crisis added to the gloom.
China’s official purchasing managers’ index for the services sector fell to 53.7 in September from 56.3 in August as growth in the manufacturing industry stabilized at a slower pace. In Europe dwindling new orders and faster layoffs marked a worsening decline for euro zone companies last month, according to business surveys that dent hopes the economy will return to growth before 2013. The impact of Europe’s crisis is also being felt in the oil business, weakening demand. “The independent European refiners have faced a sharp increase in their financing costs, and a general lack of credit availability, as European banks have cut back on their lending, particularly to companies in the commodity space,” Goldman Sachs said in a report. “Consequently, European refiners have kept their inventories lean and their runs low as they now require higher refining margins to cover higher funding costs.