Brent Under Pressure Following Poor PMI Data
Brent crude oil began the week under pressure again as market oversupply continued to outweigh supply interruption concerns.
The commodity traded at $102.75 at 7:20 GMT following disappointing economic data from both China and Europe.
With crude output on the rise, most are worried that the current state of the global economy won’t create enough demand for Brent. Though the U.S. economy has been steadily improving, the second largest consumer, China, seems stuck in an economic rut.
Data out on Monday showed that the nation’s official Purchasing Managers Index slipped to 51.1 in August from 51.7 in July. The slowdown was confirmed by HSBC’s manufacturing PMI figure of 50.2 for August, down from 51.7 in July.
Meanwhile, eurozone manufacturing growth slipped to a 13 month-low in August with a 50.7 reading. The figure, though above the 50 point mark that indicates expansion, was worse than expected and showed a marked decline from July’s 51.8 reading.
However, geopolitical tension in North African OPEC producer Libya kept a floor under crude prices as hope that the country would return to its normal export capacity faded.
Reuters reported that the Libyan government said that armed rebel groups had overtaken most ministries and state institutions in the nation’s capital, a sign that the fighting was slipping out of control. Libyan crude exports have increased to 700,000 barrels per day over the past four months, but many analysts don’t see the nation returning to it’s previous output of 1.6 billion bpd any time soon.
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