Oil tumbled below $80 a barrel for the first time in eight months on weak economic data that increased concern that demand will slow with supplies at the highest level in almost 22 years.

Futures dropped as much as 2.3 percent as manufacturing slumped in the U.S., Europe and China and more Americans than forecast filed applications for unemployment benefits. Sales of previously owned U.S. homes declined in May. U.S. oil stockpiles rose last week to the most since 1990, the Energy Department reported yesterday.

Crude futures for August delivery on the New York Mercantile Exchange fell to $79.25, the lowest intraday level since Oct. 6. Prices have slumped 27 percent from this year’s settlement high of $109.77 on Feb. 24.

Brent oil for August settlement decreased $1.82, or 2 percent, to $90.87 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium to West Texas Intermediate of $11.15 after closing at $11.24 yesterday, the lowest level since January.

Gold fell against the publication of macroeconomic data from the U.S., China and the eurozone.

As reported today, the U.S. Labor Department the number of initial claims for unemployment benefits on the basis of the reporting week, which ended June 16 amounted to 387 thousand, a decrease from the previous reporting period, two thousand hits. Nevertheless, the "new" unemployed in the U.S. in the reference week was more than expected. Thus, analysts predicted that the number of initial applications for unemployment benefits will exceed 383 thousand

The manufacturing sector in China, according to preliminary purchasing managers index (PMI), calculated to order HSBC, declined in June, the eighth consecutive month, while the rates of export orders and prices have been minimal since the beginning of 2009.

Forecasts of consumption look gloomy and Europe, where the yield of the 5-year bonds on Thursday in Spain rose to a 15-year high.

The Fed on Wednesday announced the extension of monetary incentives and said it is ready to do more to help the flagging U.S. economy. However, contrary to the hopes of some investors, the central bank refrained from the third phase of "quantitative easing".

The June gold futures on the COMEX today fell to 1572.0 dollars per ounce.

Change % Change Last

Gold 1,608 -15 -0.94%

Oil 81.06 -2.97 -3.53%