After ending last week on its fourth consecutive loss, Brent crude oil remained above $106 on Monday as weak demand competed with geopolitical issues to drive prices. The commodity traded at $106.74 at 5:04 GMT soon after weak data from China provided a shaky global demand outlook.
CNBC reported that China’s purchasing managers’ index dropped to an eight month low in March, indicating that the nation’s economy was shrinking. China’s flash Markit/HSBC PMI came in at 48.1, below the 50 point mark which separates expansion and contraction. The report also showed that new orders decreased for the fourth month in a row and that output was at its lowest level since September 2012.
China’s data combined with the seasonal demand slump weighed on Brent prices. Oil prices have fallen nearly 5 percent this month as severe winter weather comes to a close.
However, geopolitical tension has kept a floor under prices. Concern over Libyan supply, which has been depressed for months as rebels occupy several of the nation’s largest export terminals, continued after the country’s National Oil Corp announced that a problem with one of Libya’s oil pipelines took a further 50,000 to 60,000 barrels per day from the markets.
Also weighing on investors’ minds is the tension between the US and Russia over the annexation of Crimea. Over the weekend, a NATO commander announced that Moscow had a “sizeable” number of troops stationed at the Ukrainian border and that Russian President Vladimir Putin may have Moldova, another ex-Soviet republic, in his sights.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Rate collection and criteria: Click here for more information on rate collection and criteria.