Brent Slips On Demand Worries
Brent crude oil fell below $108 as investors worried about waning demand from the world's two largest oil consumers.
The commodity traded at $107.95 at 6:27 GMT on Thursday morning after data from both the US and China suggested that demand growth was unlikely.
Bloomberg reported that China's preliminary HSBC purchasing manager's index came in at 49.6 for January; a steep drop from December's reading of 50.5. The figure, below the 50 point mark which indicates contraction, is concerning as it shows that the nation is struggling to grow.
The disappointing reading can be partly attributed to the Chinese government's recent focus on re-balancing the economy in an effort to reduce the reliance on credit.
Also pressuring prices was data which showed a sharp rise in crude stocks in the US. The rise came despite the nation's record low temperatures this winter. Investors are now watching for data from the US Energy Information Administration for a better picture of US crude appetite.
Meanwhile, world leaders began peace talks about Syria on Wednesday, something many believe will be fruitless. The meetings are said not to include all those involved, and for this reason could be disregarded. Also, the Syrian government has been recently accused of committing several war crimes, something that will add a layer of complexity to the meetings.
Nevertheless, the Syrian government and opposition began the process and a United Nations mediator said the two sides could agree on prisoner swaps, ceasefires and humanitarian aid.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.