Oil fell from its highest closing level in four months in New York as signs of a slowing global economy stirred concerns about fuel demand.
West Texas Intermediate futures retreated 1.3%. European equities dropped after data showed Germany’s contracting manufacturing sector held back euro-zone growth. The yield on the nation’s 10-year bonds — Europe’s benchmark — dropped below zero for the first time in two years, underscoring fears about the region. A stronger U.S. dollar also dimmed the appeal of commodities.
“There’s enough to worry about,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “The U.S. dollar, weaker sentiment, recession fears.”
Crude is nonetheless set for a third weekly increase, having climbed above $60 a barrel in New York on March 20 for the first time this year, as OPEC and its allies reaffirmed their commitment to supply cutbacks. While disruptions in Venezuela and Iran also have squeezed supplies, uncertainty surrounding ongoing trade talks between the United States and China is keeping investors wary.