Oil exchange traded funds and crude futures followed the broader equities market lower Tuesday on renewed concerns of a faltering global economy.
Although stocks pared their losses Tuesday, the U.S. market sell-off on Tuesday closely followed the broad market decline in European markets on Monday as investors grew more anxious over the prospects that the European debt crisis could drag the global economy back into a recession, reports Dan Strumpf for The Wall Street Journal.
“The status of the [European Union] in general is weighing on the market, on top of the bad numbers we saw on Friday, the U.S. unemployment numbers,” commented Carl Larry, director of energy derivatives and research at Blue Ocean Brokerage. “It’s just going to take some time for people to find some ground.”
U.S. oil futures, which many observers view as an indicator of the broader economic sentiment, have been closely following the equities market’s downward trek. [Oil Equipment ETF Warns of Lower Crude Prices]
“Last Friday’s reported lack of U.S. job growth re-opened discussion of a double dip recession,” according to Jim Ritterbusch, head of the trading advisory firm Ritterbusch and Associates, in a report. “We continue to feel that oil demand both domestically and globally will fall short of most expectations during the current second half of 2011.”
U.S. Oil Fund
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Max Chen contributed to this article.