Oil prices flat in Asia
SINGAPORE–Oil was flat in Asia on Friday amid an extended sell-off in equities on concerns over the US central bank ending its multi-billion dollar economic stimulus measures, as well as poor Chinese manufacturing data, analysts said.
New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in August, was flat at $95.40 a barrel in morning trade and Brent North Sea crude for August delivery added five cents to $102.20.
WTI lost $2.84 in late New York trade Thursday, and the Brent dropped $3.97, its biggest loss since November 7.
“There is no substantive factor to support oil prices at this moment,” Victor Shum, managing director at IHS Purvin and Gertz in Singapore, told AFP.
“Oil futures will continue to move downwards in sync with equity markets after the US Fed announcement and poor Chinese manufacturing data,” he said.
The oil market joined a global sell-off in stocks and gold Thursday in response to Fed chairman Ben Bernanke’s comments that the US central bank could begin to wind down its $85 billion-a-month bond purchases if the economy continues to improve.
Markets were also hit by poor manufacturing data from China — a key global economic driver and the world’s top energy consumer.
HSBC’s preliminary purchasing managers’ index (PMI) released Thursday hit 48.3, worse than May’s final reading of 49.2 and its lowest since September.
A reading below 50 indicates contraction, while anything above signals expansion.
The data follows another batch of weak indicators in May that fuel concerns over the flailing strength of the world’s second-biggest economy.