Brent crude down in biggest quarterly drop since Q2 2010

Reuters, Friday 30 Sep 2011

Gloomy economic outlook and weak US demand puts oil on track for 10 per cent monthly drop

Oil prices fell on Friday due to renewed economic concerns, putting Brent on track for a drop of 10 per cent this month and its biggest quarterly decline in five quarters.

Data showed China's manufacturing sector contracted for a third consecutive month in September, adding to doubts about Europe's ability to solve its debt crisis nudged investors to sell riskier assets such as equities and commodities.

The gloomy economic outlook and weak demand in the United States have dragged on markets this quarter, while the expected return of oil exports from Libya, cut off by the civil war, added a bearish spin on markets this month.

"Demand is very poor in the Atlantic basin, prices are high, unemployment is high, so we'd need to get greater confidence and a change in the employment picture to get a strong rebound," said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland.

In London, ICE Brent for November delivery fell 62 cents to $103.33 a barrel by 11:40 a.m. EDT (1540 GMT), after hitting an early low of $101.78.

U.S. November crude dropped $1.14 to $81.00, having fallen earlier to a session low of $80.04.

Brent crude has fallen 10 per cent this month, its steepest drop for a month since May 2010. For the quarter, it is down down 8 per cent, the weakest performance since the second quarter of 2010.

U.S. crude has declined 8.8 per cent this month, its biggest drop since May this year. For the quarter, it has dropped 15.1 per cent, its worst performance since the last quarter of 2008. 

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