Brent crude futures fall below $100/bbl as China factories slow down

01 May 2013 14:59  [Source: ICIS news]

LONDON (ICIS)--Brent crude oil futures extended losses to fall below $100/bbl on Wednesday, pressured by a slowdown in Chinese factories and expectations that the US Federal Reserve will maintain its asset purchase programme.

By 13:29 GMT, the front-month June ICE Brent contract fell to an intra-day low at $99.72/bbl, representing a loss of $2.65/bbl compared to the previous settlement. The contract then edged a little higher to trade around $99.85/bbl.

At the same time, the front-month June NYMEX WTI contract was trading around $90.85/bbl, having touched an intra-day low earlier at $90.62/bbl, a loss of $2.84/bbl compared to the previous settlement.

China’s official purchasing managers’ index (PMI) for the manufacturing industry unexpectedly slowed in April pressured by falling export orders. The official PMI figure fell to 50.60 in April, down from a 50.90 reading in March. Forecasters were expecting a reading around 51.00. A reading below 50.00 indicates that the sector has contracted.

The US Federal Reserve will release a policy statement later on Wednesday. Analysts are expecting the central bank to announce it will continue its asset purchase programme amid weaker-than-expected GDP data during the first quarter.

Prices were also pressured by expectations that US stock data, due to be released later on Wednesday by the Energy Information Administration (EIA), will show a build in crude oil stocks last week.

By: Kawai Wong
+44 20 8652 3214

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