Brent crude continues to fall, dipping towards US$96, while oil on the Nymex dipped to US$83.7 on Monday on weaker numbers from China. Factory data from top energy consumer China have been feeble, while doubts remained over an EU deal. Manufacturing activity in China worsened in June with export orders, usually an indicator of the economic health of North America and Europe, posting their biggest fall since December. A European Union oil embargo on Iranian oil shipments, effective since Sunday, should lend some support to prices, but the overall grim global macroeconomic scenario is likely to cap possible gains.
Oil prices spiked on the last day of the week- Brent rose by over US$6 a barrel and U.S. crude spiked by over US$7, their fourth largest daily gains in dollar terms since the contracts were launched. The gains were largely due to the optimism that coursed through financial markets after European leaders reduced the risk of a euro zone break-up by striking a deal to strengthen the region's banking system and reduce the borrowing costs for Italy and Spain.