Oil prices down in Asia as weaker China data weighs
SINGAPORE—Oil prices fell in Asian trade Tuesday as data showing weak manufacturing activity in China suggested growth in the world’s second largest economy was slowing.
New York’s main contract, light sweet crude for delivery in July dropped 34 cents to $93.11 a barrel and Brent North Sea crude for July delivery shed four cents to $102.02.
“Economic results out of China are putting downward pressure on prices,” Victor Shum, managing director at IHS Purvin and Gertz in Singapore, told AFP.
“China’s economy is probably cooling, and this has sparked concerns about demand.”
Global banking giant HSBC said Monday its reading of China’s manufacturing activity shrank more than first reported in May, confirming the first contraction in seven months.
HSBC’s final purchasing managers’ index (PMI) reading for May came in at 49.2, the lowest for eight months and worse than the preliminary 49.6 announced on May 23.
A reading below 50 indicates contraction in the sector.
Growth in China, which is expected to offset dampening economic results in European countries, is closely watched by the market as it affects global oil prices.
Desmond Chua, market analyst at CMC Markets in Singapore, said the weaker Chinese manufacturing highlighted “concerns that small- and medium-size enterprises were suffering from a volatile export market.”
