January crude oil prices traded lower during the overnight and early morning hours, as traders grew concerned over slowing prospects for the economy and demand. The latest manufacturing data from China came in weaker than expected, to levels not seen in over two and a half years. There were also weaker than expected economic readings in Europe, an undersubscribed German Bund auction and new Fed bank stress tests that contributed to a risk-off tone this morning. January crude oil prices managed to discount private industry data late Tuesday that showed a large and unexpected weekly inventory draw. It is possible that any potential support from the draw was offset by an extremely large gasoline supply build. There was also a large global investment bank that lowered its 2012 price targets for Brent and WTI crude oil in response to slowing growth data in China and to political issues on both sides of the Atlantic.
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