Oil markets traded in a negative tone on Thursday, with Brent holding near the lowest in 14 months amid fears of increasing global supplies and signs of slower demand in the world`s top consumer China.
Futures were weighed in the early part of the trade in Asia, after a survey on China`s factory activity showed that growth in the sector slowed toa three-month low in August, adding to concerns over slowing growth in China, which weighed on sentiment this morning. The HSBC flash China Manufacturing PMI moderated to 50.3 this month, down from 51.7 in July, trailing analysts` average forecast of 51.5.
As of 03:30 a.m. ET
- West Texas Intermediate for delivery in September was down 0.30% at $93.17 a barrel in the New York Mercantile Exchange
- Brent Oil for September delivery was down 0.50% at $101.78 a barrel in the ICE Exchange in London
The European benchmark has nearly lost $10 a barrel since mid-June amid easing worries over supply disruption in Iraq and Libya.
Despite the high tension in the Middle East, Russia`s second-biggest oil producer Lukoil said on Tuesday it had shipped 1 million barrels of oil produced from southern Iraq`s giant West Qurna-2 oilfield, its first shipment from the field.
Libya`s total oil production had risen to 562 thousand barrels per day from 535 thousand at the weekend, a spokesman for National Oil Corp said.
Weakness in global demand, especially from China, is definitely negative for oil prices and further signs of slowing economic growth will have a downside impact on the sentiment as well.
Markit Economics is scheduled to release Eurozone flash Purchasing Managers` Index, or PMI report for Eurozone. The flash composite PMI for the euro-area is forecast to decelerate to 53.4 from 53.8 a month ago.