Last Update: May 02, 2023, 00:03 IST
China’s manufacturing activity unexpectedly fell in April, official data showed on Sunday, the first contraction since December in the manufacturing purchasing managers’ index. (Image: Reuters file)
Brent crude fell $1.88, or 2.3%, to $78.45 a barrel by 1:28 p.m. EDT (1728 GMT). US West Texas Intermediate (WTI) crude was trading down $1.90, or 2.5%, at $74.88.
Oil prices fell nearly $2 a barrel on Monday after weak economic data from China and hopes for another US interest rate hike in support of OPEC+ supply cuts set to take effect this month.
Brent crude fell $1.88, or 2.3%, to $78.45 a barrel by 1:28 p.m. EDT (1728 GMT). US West Texas Intermediate (WTI) crude was trading down $1.90, or 2.5%, at $74.88.
China’s manufacturing activity unexpectedly fell in April, official data showed on Sunday, the first contraction since December in the manufacturing purchasing managers’ index.
“The market is highly dependent on what happens with China, and most real-time news from the manufacturing sector was disappointing,” said Peter McNealy, analyst at Third Bridge.
He said China is expected to be the biggest driver of oil demand growth this year.
The US Federal Reserve, which meets on May 2-3, is expected to hike interest rates by 25 basis points. The US dollar rose against a basket of currencies, making oil more expensive for other currency holders.
“We remain at the mercy of sentiment around a Chinese reform or lack thereof, while the backdrop of ongoing monetary tightening in the US leaves us in a ‘good is bad’ realm when it comes to economic data or news flow ,” said Kepler analyst Matt Smith.
Oil has been hit by banking fears in recent weeks and in what is the third major US institution to fail in two months, US regulators seized First Republic Bank over the weekend ahead of a deal in which JP Morgan bought most of its assets. .
Voluntary production cuts of about 1.16 million barrels per day by members of the Organization of the Petroleum Exporting Countries and allies including Russia, a grouping known as OPEC+, take effect from May.
Oil prices took some support from US manufacturing activity, which hit a three-year low in April as new orders improved slightly and employment picked up.
“Crude prices are trimming losses on optimism the economy could strengthen now that the banking drama is behind us and on signs factory activity is improving,” said OANDA analyst Edward Moya.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
