WASHINGTON (dpa-AFX) - Oil futures pared early gains ended lower on Monday amid concerns about the outlook for demand after data showed a sharp contraction in Eurozone business activity, and continued weakness of the Chinese economy.
Oil prices moved higher earlier in the session as escalation in the Israel-Hezbollah conflict prompted international airlines to suspend flights to the Middle East region.
West Texas Intermediate Crude oil futures for November ended down $0.63 or 0.89% at $70.37 a barrel.
Brent crude futures ended lower by $0.59 or about 0.8% at $73.90 a barrel.
The euro area private sector activity posted a renewed contraction in September, signaling a further weakening of the economy, a survey compiled by S&P Global showed Monday.
The HCOB flash composite output index dropped to 48.9 in September from 51.0 in August. The reading was the lowest in eight months and remained below the forecast of 50.6.
The fall in overall business activity was driven by a deepening downturn in manufacturing activity, where production fell for the eighteenth month in a row.
Meanwhile, services business activity continued to grow, but the pace of growth was the weakest since February. The manufacturing Purchasing Managers' Index slid to a nine-month low of 44.8 in September from 45.8 in the prior month. The score was expected to drop to 45.7.
The services PMI posted 50.5 in September, which was down from 52.9 in August and well below forecast of 52.3.
On the geopolitical front, Israel's military reportedly pounded targets in south and east Lebanon today and said more strikes were coming.
A military spokesman has warned of 'extensive, precise' strikes against Hezbollah and called for civilians to evacuate or move away from areas in which the militant group operates.
Hezbollah launched more than 100 rockets early Sunday across a wider and deeper area of northern Israel after the country allegedly detonated several electronic devices used by the Lebanese group.
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