Prices for West Texas Intermediate (WTI) crude oil dropped for a second day on the first day of the trading week, as investors express their worries over the oil demand from China and the slow growth in the world’s second-largest oil consumer due to the weak manufacturing data.
The North American WTI for March delivery lost 0.35%, trading at $97.09 per barrel on the New York Mercantile Exchange at the time of writing. At the same time the Brent crude oil for March settlement declined 0.09%, trading at $106.31 per barrel on the London-based ICE Futures exchange. The Brent crude was at a premium of $8.80 per barrel to WTI.
WTI- China Data
The Drop in oil prices were dragged lower by the downbeat Chinese manufacturing Data and service Purchasing Managers’ Index (PMI) data. The Chinese manufacturing PMI dropped to a six-month low of 50.5 for January, dropping from 51.0 previously recorded in December.
The gauge of non-manufacturing activity, released by China revealed the services sector PMI was dropping close to a two-year low of 53.4, adding signs of China’s growth slowdown.
WTI – US Data
Later during the day, the institute for Supply Management is expected to show manufacturing PMI figures, as analysts are expected to see a decline of 56 in January, compared to 57 recorded in the previous month.
Other news
Over the last week, the surge in crude oil prices were driven by the Federal Reserve’s (Fed) conclusion to cut its monthly bond purchases further as the world’s largest economy shows signs of improvement.
The rise in black gold prices was driven by the US Cushing crude inventories data, which revealed a rise of 237,000. Meanwhile in the Eurozone, the manufacturing gauge is forecasted to remain unchanged at 53.9 for January, while countries in the 18-nation euro region are expected to report final readings for January.
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