Crude oil futures eased off the previous session’s high on Wednesday after grim economic data from Europe overshadowed hopes of stimulus from central banks across the globe.
Brent crude for August dropped 91 cents to settle at $99.77 a barrel after surging around 3% the previous session on fears about rising tensions between Iran and the West.
US crude oil futures fell 60 cents to $87.06 a barrel in late UK trading with volumes lighter than usual because of the US Independence Day holiday.
Crude surged 4.7% to settle at a five week high on Tuesday on concern about Iran testing missile weapons. There were also reports that Iran was mulling legislation to close the Strait of Hormuz, a key oil gateway.
Demand was also supported by the view that the European Central Banks and central banks across the globe will announce further policy easing measures the revive growth. The ECB is widely expected to cut interest rates to below 1% at its meeting on Thursday.
However by Wednesday a string of downbeat economic data underlined the view that the world economy is slowing. Growth at Chinese service-sector firms slowed to a 10-month low in June. A separate survey showed Germany’s services sector registered surprise stagnation in June, after an eight-month period of growth.
Among precious metals gold also weakened on Wednesday after hitting a two-week high the previous session.
Comex gold for August fell $5.80 to $1,616.70 an ounce in tight range on Wednesday with regular US markets closed for a holiday.
The previous session gold rallied $24.10 at $1,621.80 an ounce on increased expectations that central banks across the globe will take further easing measures to boost growth.