Oil extended its losses in the Asian trade today on mounting concerns about an economic slowdown in China, with the strong US dollar also putting pressure on prices, analysts said.
New York’s main contract, West Texas Intermediate (WTI) for delivery in September, was down 57 cents at $104.82 a barrel in mid-morning trade, while Brent North Sea crude for September shed 36 cents to $106.83.
WTI dived $1.84 in New York yesterday after HSBC’s preliminary purchasing managers (PMI) index of Chinese manufacturing activity hit an 11-month low, signalling weaker demand in the world’s top energy consumer. Brent sank $1.23 in London.
“We are seeing a continuation of last night’s pullback in crude prices over the weak Chinese data,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said.
The sluggish reading in China overshadowed upbeat economic data in the Euro Zone, where private business activity returned to growth in July for the first time in 18 months.
Adding to the selling pressure was a pick-up in the dollar, which makes oil more expensive for buyers using weaker currencies, denting demand.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.