Oil Prices Take Another Dip: How Europe’s Production Numbers Are Lighting the Flame
It’s that time of the day when oil prices drop again—after soaring to their highest point since November last year just a week ago. As of roughly 10:30 a.m. GMT, crude slipped about half a percent, sending the markets a little downward.
Why the Drop? The Eurozone’s Manufacturing Woes
The main culprit this afternoon is the sharper‑than‑expected slowdown in manufacturing across the Eurozone, especially Germany and France. Even though the UK’s factories had just stopped shrinking for the first time in two years, it wasn’t enough to keep oil on a steady path.
- March PMI Glimpse: The early March Purchasing Managers’ Index (PMI) shows that German and French factories are still in the red, dragging the Eurozone’s overall activity further into contraction.
- Demand Still Low: Despite pump‑ups in confidence for the months ahead, real demand remains stubbornly weak (S&P Global).
- Good News from China: Remember the warm spike in Chinese industrial output last month? That was a bright spot, but it couldn’t counterbalance the gloom in Europe.
Rate‑Cut Hints But No Energy Relief
Fed Chair’s talk about cutting rates three times this year—possibly starting in the summer—has not yet soothed the energy market. Oil traders appear to be shrugging off the positive signals. The concern is compounded by the fact that U.S. inventories keep taking a dive for the second straight week, and this week the pull is larger than anyone predicted since January.
What Comes Next
Investors are keeping a close eye on today’s preliminary U.S. S&P Global PMI readings. The consensus? A probable slowdown in both services and manufacturing growth.
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