Brent crude falls towards $102 as concerns grow over China

Manufacturing sector in world’s top oil consumer unexpectedly slowed in April

The crude benchmark fell more than 7 per cent during April, its biggest monthly decline in 11 months. Photograph: Lucy Nicholson/Reuters

The crude benchmark fell more than 7 per cent during April, its biggest monthly decline in 11 months. Photograph: Lucy Nicholson/Reuters


Oil futures eased to near $102 a barrel today as fresh concerns over economic growth in the world’s top oil consumers, China and the United States, weakened the demand outlook.

The crude benchmark fell more than 7 per cent during April, its biggest monthly decline in 11 months, hurt by indicators suggesting the global economy remains in a fragile state.

Brent crude lost 20 cents to $102.17 a barrel by 8.10am, after falling the most in nearly two weeks yesterday. US oil was down 39 cents at $93.07 a barrel.

“It’s the same picture of relative slow demand,” Oliver Jakob, analyst at Petromatrix, said.

Growth in China’s manufacturing sector unexpectedly slowed in April as new export orders fell, raising fresh doubts about the strength of the economy after a disappointing first quarter.

“Crude prices are down today because of the big stock increase in the API and the worse-than-expected China PMI,” said Ken Hasegawa, a commodity sales manager at Newedge Japan.

Investors were awaiting the US ISM manufacturing data later today after business activity in the US Midwest unexpectedly contracted in April to its lowest level since September 2009.

At a two-day meeting that wraps up today, the Fed is widely expected to maintain its stimulus policy to support an economic recovery that is nearly four years old but still too weak for the job market to truly heal.

“There are going to be important macro movements over the next two days with the Fed, and the ECB (European Central Bank) meeting tomorrow,” Mr Jakob said.

The ECB is widely expected to cut interest rates to a new record low of 0.5 per cent after data yesterday showed inflation in the euro zone has fallen to a three-year low and unemployment had hit a record of 12.1 per cent.

Supply concerns

Data from the American Petroleum Institute yesterday showed US crude stocks rose by 5.2 million barrels, larger than a forecast 1 million barrel increase.

The more closely-watched report from the Energy Information Administration (EIA) will be released at 2.30pm today.

Supply from the Organization of the Petroleum Exporting Countries is set to average in April 30.46 million barrels per day (bpd), up from 30.18 million bpd in March, a Reuters survey showed.

Saudi Arabia’s energy minister said yesterday the kingdom does not plan to expand its oil production capacity to 15 million barrels per day, dispelling a suggestion put forth by a member of his country’s royal family.

Sign In

Forgot Password?

Sign Up

The name that will appear beside your comments.

Have an account? Sign In

Forgot Password?

Please enter your email address so we can send you a link to reset your password.

Sign In or Sign Up

Thank you

You should receive instructions for resetting your password. When you have reset your password, you can Sign In.

Hello, .

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

Thank you for registering. Please check your email to verify your account.

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.