Eurozone business activity contracted unexpectedly and sharply this month as the dominant services sector stalled and the decline in manufacturing accelerated.
Oil prices fell on Monday, as disappointing business activity in the Eurozone heightened concerns about weakening demand.
Brent crude futures for November delivery dropped 59 cents, or 0.8%, to $73.90 per barrel, while U.S. West Texas Intermediate (WTI) crude for November fell 63 cents, or 0.9%, to $70.37 per barrel.
The Eurozone’s abrupt contraction in business activity this month was driven by stagnation in its dominant services sector, alongside a faster decline in manufacturing.
Meanwhile, U.S. business activity remained stable in September, though the average prices of goods and services rose at the fastest pace in six months, which could signal a rebound in inflation in the coming months.
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In China, the world’s largest oil importer, deflationary pressures persist as the country struggles to boost weak growth, despite a series of policy measures aimed at stimulating domestic spending.
Disappointing economic data from China and the unexpected slowdown in European manufacturing have pushed crude demand to its lowest levels this year.
On the supply side, oil prices found some support due to concerns over Israeli airstrikes targeting Hezbollah on Monday.
Additionally, a tropical disturbance near the Gulf of Mexico threatens oil production. Shell announced on Sunday that it would halt production at its Stones and Appomattox facilities in the region as a precautionary measure.
Both oil benchmarks had surged more than 4% last week, driven by the U.S. Federal Reserve’s decision to cut interest rates by 50 basis points.