On Wednesday oil prices were lower as downbeat Chinese manufacturing data added to growing concerns about the economy
of the world’s second-biggest crude buyer.
On the New York Mercantile Exchange, light, sweet crude futures for
delivery in November traded at $46.12 a barrel, down $0.24 in the
Globex electronic session.
November Brent crude on London’s ICE Futures exchange fell $0.32 to $48.76 a barrel.
Nymex crude prices are down roughly 7% month-to-date while Brent is down 9.4% in the same period.
Earlier, reading from Caixin Media Co. and research body Markit Ltd. signaled Chinese manufacturing activity fell to a six-and-a-half year low of 47.0 in September from a final reading of 47.3 in August.
A reading above 50 indicates a rise from the previous month, while a reading below that signals contraction.
Asian markets reacted negatively to the data.
The Hang Seng Index was down 2.86% while the Shanghai Composite Index lost 1.72%. Australia’s S&P ASX 200 fell 1.92% and Japan's Nikkei dropped 1.96%.
Capital Economics said that while China’s weaker-than-expected
manufacturing data added to fears over China's shrinking growth, broader
economic indicators don’t point to a deepening economic crisis just yet.
“With most of the key leading indicators such as fiscal spending and credit growth now looking supportive, we continue to expect a cyclical recovery in economic activity over the coming quarters,” the research firm said.
Oil prices, along with the overall commodities sector, have been increasingly sensitive to any negative news on China’s economy in recent weeks, and market sentiment has capped price gains.
Late Tuesday, the American Petroleum Institute’s latest report showed
crude-oil stocks in the U.S. dipped 3.7 million barrels for the week
ended September 18.
While this is steeper than expected and is temporarily supportive for oil prices, traders are watching the official Department of Energy data slated for release later Wednesday.
