US crude falls to near five-week low

US crude fell to near a five-week low on Wednesday after ratings agency Moody\'s assigned a negative outlook to the United States, stoking concern that demand may fall as the world\'s top oil user faces longer-term fiscal and economic challenges.Worries are growing that major economies may slip back into recession as Europe\'s debt crisis deepens and after global manufacturing data proved disappointing this week. The slowdown is having a direct impact on U.S. oil demand as consumer spending and gasoline use crumble. US crude fell 39 cents to $93.40 a barrel by 0353 GMT, after slipping to $93.08 on Tuesday, the lowest intraday price since June 29. Brent slid 41 cents to $116.05, about $11 below this year\'s peak above $127.Confirmation of a last-gasp deal among US politicians on Tuesday to avoid a US default brought little relief to global markets, as investors focused on the longer term challenges for the world\'s largest economy. Disappointing economic data also encouraged investors to reduce exposure to risk and seek the safe haven of the Swiss franc and gold.\"Even if the debt ceiling issue in the United States has been cleared, that is only successful in that it avoids a default,\" said Ken Hasegawa, a commodity derivatives manager at Japan\'s Newedge brokerage.\"The deficit is still a big problem and that is creating financial fear. People are decreasing gasoline consumption,\" Hasegawa said, adding that US oil may fall to below $90.Moody\'s Investors Service late on Tuesday confirmed its Aaa rating of US, citing the decision to raise the debt limit, but assigned a negative outlook that could pressure lawmakers to cut the deficit.The decision by Moody\'s came a few hours after rival Fitch Ratings upheld its AAA rating of the US Fitch also warned the world\'s largest economy must cut its debt burden to avoid a future downgrade.The greater need for fiscal discipline comes as the slowdown of the US economy intensifies. US consumer spending dropped in June for the first time in nearly two years and incomes barely rose, signs the economy lacked momentum as the second quarter drew to a close. The nation\'s retail gasoline demand fell 3.1 percent in the week to July 29 from a year earlier, as price gains since the beginning of July weighed on consumption, MasterCard said.Industry group the American Petroleum Institute on Tuesday said gasoline stocks jumped a bigger-than-expected 2.5 million barrels and distillate stocks rose in line with forecasts by 1.4 million barrels.US crude inventories unexpectedly fell 3.3 million barrels last week. Inventory statistics from the US government\'s Energy Information Administration will follow on Wednesday.Tuesday\'s data followed weak manufacturing readings a day earlier from the US, Europe and China and last week\'s disappointing second-quarter US GDP estimate, which reinforced fears that slowing economic growth threatens to dampen oil demand.In other markets, Asian stocks fell for a second successive day on Wednesday and the Swiss franc held hefty gains as renewed fears about the health of the global economy rattled financial markets.Europe\'s sovereign debt crisis also contributed to the gloom -- Italian bond yields hit their highest in the euro\'s 11-year lifetime on Tuesday. from / Arabian Business News