Oil drops on signs China, US fuel demand may slow

Oil declined for a second day in New York as investors bet that a slump in Chinese imports and rising unemployment in the US indicated that fuel demand may falter in the world's biggest crude-consuming nations. Futures slipped as much as 0.9 per cent after China's net oil imports shrank 10 per cent in June to the lowest in eight months, according to Bloomberg calculations based on General Administration of Customs data released on Sunday. Prices also dropped after the US Labour Department said on Friday that employers added the fewest workers in nine months and the unemployment rate unexpectedly rose to the highest this year. Unemployment rate Article continues below "The one thing that's going to restrain the demand recovery is this very high unemployment rate," said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil in New York will average $113 (Dh415) a barrel in the third quarter. "It dims the outlook on the second half of the year for demand." Crude for August delivery fell as much as 90 cents to $95.30 a barrel in electronic trading on the New York Mercantile Exchange, and was at $95.44 in Singapore. The contract dropped $2.47, or 2.5 per cent, to $96.20 on July 8. Prices are 28 per cent higher the past year. Brent oil for August settlement decreased 87 cents, or 0.7 per cent, to $117.46 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $22.06 to US futures. The difference reached a record $22.29 on June 15.