NEW YORK ( TheStreet) -- Oil prices were giving up six straight days of gains as worries about China and Europe sparked selling among traders.
Brent crude oil for December delivery was falling $1.58 to $107.39 a barrel and West Texas Intermediate (WTI) light sweet crude oil for November delivery was tumbling $2.21 to $83.36, largely in reaction to worries that China, the world's largest consumer of energy, will be consuming less oil going forward.
China overnight posted a smaller-than-expected trade surplus; and crude imports fell 12.2% year-on-year last month. Meanwhile, copper stockpiles nearly doubled than the amount projected, pointing to less consumption of the metal than expected. The country spoke of "severe challenges" in the face of the ailing of the global economy. "This is raising concerns about the engine-room of the global recovery, and its appetite for crude going forward," said Matt Smith, commodity analyst at Summit Energy, a subsidiary of Schneider Electric. "Add this to a combo of slipping equities and a euro trundling lower as European debt worries flow (after ebbing thus far this week), and crude laces up its selling shoes to run lower." The euro was weakening against the dollar Thursday, down 0.7% -- if the euro gets weaker, the dollar gets stronger, leading to weaker oil -- as the markets braced for disappointing developments relating to the European bank recapitalization plans, leading up to the Oct. 23 European Union summit. "Market optimism towards bank recapitalization plans has been steadily building and this point illustrates the complications of getting a broad consensus," say UBS analysts. Receiving much attention has been a Financial Times article suggesting that European banks are uncomfortable with raising new capital in the means so far suggested by EU policymakers, given the high costs involved. The deep, structural weaknesses of the 17-member euro region's banking sector gnaws at long-time energy analysts such as WeatherBELL Analytics' Alan Lammey, who describes the current state of the European markets as "manic-depressive." "There's some major threats to their mega-banks and banking system, so they're scrambling to band-aid them," he said. "Just like TARP (Troubled Asset Relief Program) did here in the U.S. a couple of years ago." In a monthly report, the European Central Bank warned that 2012 may bring gross domestic product contraction for the eurozone as downside risks continue to mount. Energy stocks were retreating. EOG Resources ( EOG) was tumbling 2.9% to $78.45; Chesapeake Energy ( CHK) was tumbling 2.3% to $26.13; Anadarko Petroleum ( APC) was losing 2.7% to $65.49; Apache ( APA) was surrendering 2.8% to $85.46; Triangle Petroleum ( TPLM) was giving up 3.9% to $3.95; Occidental Petroleum ( OXY) was lower by 2.1% to $79.31; and Exxon ( XOM) was down 1% to $76.38. -- Written by Andrea Tse in New York. >To contact the writer of this article, click here: Andrea Tse.