Crude oil prices plummet on signs of continued slow trajectory in the Chinese and European economies. File photo by Monika Graff/UPI |
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NEW YORK, Oct. 23 (UPI) -- Crude oil markets shrugged off economic stimulus actions in China and Europe, with key indices dipping into negative territory in early Friday trading.
Crude oil prices were moving into positive territory in pre-market trading, though indications of a rally fizzled by the start of trading in New York. West Texas Intermediate, the U.S. benchmark price for crude oil, was down 1.8 percent from the previous day to $44.52 per barrel. Brent was down 0.7 percent in early trading to trade at $47.74 per barrel.
The European Central Bank decided to keep interest rates unchanged. ECB President Mario Draghi said the regional economy was showing signs of resiliency, but risks remained on the horizon. While low oil prices are a de facto stimulus for consumers, other metrics suggest downside risks remain for growth and inflation, he said at a conference in Malta.
Greek economic crises threatened to drag on the European economy. Inflation in the European economy in September was negative, suggesting demand was sluggish despite the consumer benefits from low oil prices.
Elsewhere, the Chinese government cut lending rates in an effort to arrest the decline in the Chinese market. China has touted slow but steady growth, through a string of summer crashes in the Shanghai Composite Index suggested one of the world's largest economies was on the decline.
Anton Cheremukhin, an economist with the Federal Reserve Bank of Dallas, said in a research note China's economy will continue to expand for the next few decades, but the rate will decline.
"China's growth rate has recently slipped to the 7–8 percent range, prompting some analysts to ask whether the miracle has come to an end," he wrote. "The short answer may well be that China, while facing a robust future, is encountering the increasing constraints of an advanced economy."
In the United States, the employment scenario remains mixed. Seasonally adjusted claims of unemployment for the week ending Oct. 17 increased 3,000. The four-week average remains at its lowest level since Dec. 15, 1973.
