Oil market drops on US demand fears

Global oil prices fell today as weak data stoked fresh demand fears in top consumer the United States, while Iraqi crude supplies appeared unaffected by ongoing violence, analysts said.
Brent crude for delivery in August retreated 53 cents to USD 113.47 per barrel in late afternoon London trade.
US benchmark West Texas Intermediate for August sank USD 1.18 to USD 105.32 a barrel, as both contracts were hit also by profit-taking.
Wall Street tipped lower on the back of weak consumer spending data and mostly disappointing corporate earnings news.
Consumer spending, which accounts for more than two-thirds of US economic growth, rose a mere 0.2 percent in May after flattening in April, the Commerce Department said.

Initial jobless claims, a sign of the pace of layoffs, totalled 312,000 in the week ending June 21, a decrease of just 2,000 from the previous week, the Labor Department added.

Traders were also reassessing Wednesday's data which showed that US crude oil inventories unexpectedly rose by 1.7 million barrels in the week ending June 20.
That confounded analysts' consensus forecasts for a 1.2-million-barrel decline, and indicated weaker-than-expected demand.
"As a result of the weaker data and the build in crude stocks ... Investors are all of a sudden refocusing their attention on the demand side of things," said analyst Fawad Razaqzada at trading site Forex.Com.

"They are realising that demand is simply not strong enough to justify oil prices at these elevated levels."
Added to the downbeat mood, revised data showed Wednesday that the US economy shrank a steep 2.9 percent in the first three months of 2014, sharply worse than the previous estimate of a 1.0-per cent decline.
Yesterday, New York oil prices had been lifted by a report suggesting that Washington will ease a decades-old ban on crude exports.
The Wall Street Journal reported that the US Commerce Department has approved the first exports of unrefined oil in nearly four decades, potentially clearing the way for a bigger policy change that could tighten the US crude market.