Oil prices down in Asia on weak China data

AP FILE PHOTO

SINGAPORE – Oil prices were down in Asia on Monday as weak Chinese manufacturing activity fuelled concerns over energy demand in the world’s second biggest economy, analysts said.

New York’s main contract, West Texas Intermediate light sweet crude for delivery in August, was down 38 cents to $96.18 a barrel and Brent North Sea crude for August shed 44 cents to $101.72 in morning trade.

China’s official purchasing managers index came in at 50.1 in June, down from 50.8 in May.

A reading above 50 indicates growth and anything below points to contraction.

“The poorer Chinese PMI data are fuelling concerns about oil demand in China and putting downward pressure on prices,” Victor Shum, managing director at IHS Purvin and Gertz in Singapore, told AFP.

“The market sentiment remains bearish as all the recent data out of China point to a slowdown in the Chinese economy,” he said.

The results come amid a recent liquidity crisis in the energy-guzzling Asian giant, which had caused lenders to put the brakes on loans and added pressure on oil prices.

The People’s Bank of China said last week it had made money available to some firms in a bid to prevent a cash crunch that had sent shares into a tailspin.

China is the world’s biggest energy-consuming nation and the health of its economy is closely watched by oil traders.