Oil below US$107 after China PMI drags

Publish date: Mon, 24 Mar 2014, 06:44 PM
LONDON: Brent crude oil slipped on Monday, weighed down by Chinese data pointing to lower demand in the world's biggest energy consumer, but supported by worries that the Ukraine crisis and turmoil in Libya could hit oil supplies.
China's manufacturing activity shrank in March, a preliminary private survey showed, adding to a string of weak indicators this year that have reinforced concerns about a slowdown. The government aims to reduce the economy's dependence on exports, but investors are worried the growth is cooling faster than expected.
Brent crude for May was down 30 cents at US$106.62 a barrel by 0930 GMT. The oil benchmark fell for a fourth straight week last week. US oil edged up 5 cents to US$99.51 a barrel.
"Oil is caught," said David Hufton, managing director of London brokerage PVM Oil Associates.
"Anything that threatens economic growth especially in emerging economies is negative for oil demand and therefore bearish. On the other hand, anything that threatens supply, real or perceived, is bullish for oil prices."
Weaker-than-expected Chinese figures are raising expectations the government could step in to stimulate the economy. Chinese equities have risen on hopes of a stimulus.
Brent crude has lost almost four per cent this year, eventually giving up gains after rising to US$112 in early March, a more than two-month high, amid geopolitical risks as Russia took control of Ukraine's Crimea region.
Concerns that tensions in the region could still worsen helped stem declines. NATO's top military commander said on Sunday Russia had built up a "very sizeable" force on its border with Ukraine and Moscow may have a region in another ex-Soviet republic, Moldova, in its sights after annexing Crimea.
Russian troops, using armoured vehicles, automatic weapons and stun grenades, seized some of the last military facilities under Ukrainian control in Crimea on Saturday. Russian President Vladimir Putin formally annexed the Black Sea peninsula the day before.
Worries of continued unrest in Libya and other oil exporting countries have also helped put a floor under oil prices, even though the market has come off with the end of the severe winter weather in the Northern Hemisphere, Nunan said.
Rebels have occupied ports and oilfields, depressing Libya's oil production to less than 250,000 barrels per day, the state-run National Oil Corp said.
A pipeline problem further cut production at the southwestern el-Feel oilfield to between 50,000 and 60,000 bpd from 80,000 bpd, the state-run National Oil Corp (NOC) said on Sunday.
A commercial oil tanker seized by US forces after it loaded crude at a Libya port held by anti-government rebels has docked back in the capital Tripoli, a Reuters witness said on Sunday.
US special forces boarded the tanker a week ago off Cyprus, days after it left Es Sider port, which is controlled by rebels who demand more autonomy and oil wealth in defiance of the central government.-- Reuters
Discussions
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fortunebullz

China PMI nothing to worry about! Wait for official PMI figures! HSBC ones always off the mark!

2014-03-24 19:14

fortunebullz

China should be viewed in provinces not as a whole. Beijing is robust! Shanghai is robust! Many some kampongs heading for defaults! But who gives a damn! Western analysts are wrong! So did George Soros this time!

2014-03-24 19:18

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