Crude prices were seen trading lower on Monday, dragged lower by China’s HSBC Flash Purchasing Managers Index (PMI). The weak data indicates a further slowdown in the world’s second largest oil consumer. The North American WTI edged 0.35% lower to $99.12 a barrel on the New York Mercantile Exchange on Monday. At the same time futures for Brent crude declined 0.38% lower to $106.52 a barrel on the London-based ICE Futures Europe exchange.
Crude – China
China Purchasing Mangers’ Index for March from HSBC Holdings Plc and Markit Economics came in 48.1 lower, compared to analysts’ estimates of 48.7 and a final reading of 48.5 seen in the previous month. The figures shows an economic slowdown in China; the world’s second largest oil consumer. A figure below 50 indicates a contraction and above indicates expansion. The slowdown in the nation’s economy is mainly due to the weak domestic demand, as analysts predict Beijing to launch policy measures to ensure steady economy growth. The manufacturing output index dropped to an 18-month low of 47.3 in March, compared to 48.8 seen in the previous month.
Crude – Ukraine
Meanwhile the ongoing tension between Russia and Ukraine continues as the Russian troops seized military bases in the Crimean region. While the Western nations imposed tougher sanctions on Russia, which could add worries over the supply disruptions from the world’s second largest oil producer. “Oil got bashed last week,” Tom James, the managing director of Navitas Resources Ltd. in Dubai said yesterday. “It did firm up a bit at the end of the week as we saw an escalation in sanctions regarding Russia. We’re close to support levels, so I’d see $103-$105 as a good buying opportunity,” he added. Countries from the eurozone and the US are also expected to publish manufacturing indicators for March later in the day. Visit www.hymarkets.com to find out more about our products and start trading today with only $50 using the latest trading technology today
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