Crude falls $1/bbl on weak China manufacturing data
01 July 2011 11:22 [Source: ICIS news]
SINGAPORE (ICIS)--Crude futures fell by more than $1/bbl on Friday, undermined by demand worries, following release of weaker manufacturing data from ?xml:namespace>China - the world’s second largest oil consumer.
At 09:45 GMT, August Brent on London’s ICE futures exchange was trading at $111.05/bbl, down by $1.43/bbl from the previous close. Earlier, the North Sea benchmark fell to a session low of $110.67/bbl, down by $1.81/bbl.
August NYMEX light sweet crude futures were trading at $94.42/bbl, down by $1.00/bbl from the previous close. Earlier, the contract fell to an intra-day low of $94.18/bbl, down by $1.24/bbl.
China’s June purchasing manager’s index (PMI), a barometer of manufacturing activity, fell to 50.9% from 52% in May. The decline was attributed to weakness in the global economy and the impact of tighter monetary policy in China.
Meanwhile, Germany, the Netherlands and the US sought bids for oil released from their national reserves. The releases form part of the 60m barrels of oil that International Energy Agency (IEA) member nations are set to release over the coming weeks.
Concerns over the ongoing disruption of oil supplies from Libya, and worries that greater tightness in the oil market threatens the global economic recovery, prompted the IEA’s move. But critics have suggested that the move will have limited longer-term impact.
OPEC secretary general Abdulla al-Badri demanded that the IEA action be halted earlier this week and suggested that it was possible OPEC may cut output in response.
Despite weakness on Friday’s trade, crude prices were still up substantially week on week, with ICE Brent futures around 6% higher and NYMEX WTI up by around 4%. Prices have been buoyed in the last few days by a larger-than-expected fall in US crude stocks and news that Greece had passed its fiscal austerity plan, which dampened worries of a possible default on its sovereign debts.
By: James Dennis+65 6780 4359
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