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Oil prices eased in Asia today, hit by disappointing manufacturing data and a pipeline closure in the US, analysts said.
New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in May, shed 15 cents to $96.92 a barrel and Brent North Sea crude for May dropped 12 cents to $110.96.
“Lower prices are mainly a reaction to the weak manufacturing indices (in the US),” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
“The fact that oil rallied before the Easter break made the market more vulnerable to indicators of moderating economic growth,” he told AFP.
The Institute for Supply Management yesterday said its US manufacturing index fell to 51.3 in March from 54.2 in February. While anything above 50 indicates growth, the slower pace raised concerns about the recovery in the economy.
Other analysts said the closure of ExxonMobil’s Pegasus pipeline in Arkansas following a rupture on Friday also sparked fears that crude oil supply will back up in the US MidWest.
There are concerns the pipeline closure could exacerbate inventory stocks at the Cushing, Oklahoma, delivery point for WTI futures in New York as crude cannot be pushed through to the refineries.
A build-up in stockpiles puts a downward pressure on prices.
“We’re seeing a correction of positions after the Easter break as dealers shifted their focus to the United States and a possible boom in oil supply there,” David Lennox, resource analyst at Fat Prophets in Sydney, said.
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