Oil prices edged higher in Asian trade today on easing concerns about a sharp economic slowdown in China, the world’s biggest energy user, analysts said.
However, economic and political uncertainty in Europe capped prices and a weaker euro also dampened the demand for dollar-priced crude.
New York’s main contract, West Texas Intermediate crude for delivery in June, was up six cents at $103.17 per barrel while Brent North Sea crude for June gained 14 cents to $118.85.
Oil prices had slipped yesterday following an HSBC Purchasing Managers’ Index data which showed China’s manufacturing activity contracted for a sixth straight month in April.
Analysts, however, said there was a silver lining in the data that indicated recovering demand in the world’s second largest economy.
The PMI reading was 49.1 in April, up from 48.3 in March, denoting an improvement but no return to expansion just yet. A reading below 50 indicates contraction while anything above 50 shows growth.
“The Chinese PMI data is a case of whether you look at the glass as half-full or half empty,” said Mr Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.
“Some traders and investors are seeing this as a buy opportunity. There is optimism about the Chinese economy because the HSBC PMI actually showed improvement in output, and that has pushed oil prices up.”
Political and economic uncertainty in Europe remained a bearish factor, analysts said.
Spain — one of the Euro Zone’s beleaguered economies — had yesterday said that it had plunged back into recession in the first quarter of 2012.