Further indications of a slow global economic recovery coupled with ample supply set crude futures up for their largest weekly drop since mid April on Friday. Brent prices slipped toward $102 and traded at $102.45 at 9:17 GMT on Friday morning.
Brent tumbled to a three week low on Thursday following data from China that showed the industrial giant's factory activity contracted for the first time in more than half a year. Chinese Purchasing Managers Index data showed the nation's reading was 49.6, just shy of the 50 point mark with indicates expansion. The report also showed that new orders fell in May, which stoked fears that the nation would fall short of its 7.5 percent growth target this year.
Also weighing on prices is speculation that the US Federal Reserve could ease up on its $85 billion per month stimulus efforts which have flooded markets with billions of dollars over the past few years. Improving jobs data and an increase in new home sales all point to the nation's recovery and could give the Fed cause to pull back on its quantitative easing.
Moving forward, investors will be eyeing the US as the nation's driving season kicks off this weekend. However, many don't expect to see a demand increase as last week's data showed that the nation's gasoline stockpiles were at their highest level since 1999. According to CNBC, the dismal demand outlook could pull Brent prices even lower over the next few months if economic indicators don't pick up. Some analysts are saying the commodity's price could fall below the $100 mark, as low as $95 per barrel.
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