Oil prices saw some selling pressure on Thursday after a Chinese manufacturing gauge slipped to a seven-month low, suggesting demand may be slowing in world's second largest economy.
The impact of the data from China, the world's second top oil consumer, was evident on the energy markets this morning, as the flash February reading for a Purchasing Managers' Index released today by HSBC Holdings Plc and Markit Economics found another slowdown in the country’s factories in February, reigning concerns about the prospects of China's economy and markets in the region. As of 02:51 ET:
- WTI Crude was down 0.02% at $103.29 a barrel
- Brent Crude was down 0.35% $110.09 a barrel
China's preliminary PMI came in at 48.3 in February compared with 49.5 in Janaury, while analyts' called for a median forecast at 49.4. A reading below 50 indicates contraction.
MEanwhile, the benchmark for US crude, which hit a four-month high yesterday, is trading nearly flat again after showing slight volatility in the early hours of trade today amid expectations of lower crude and oil stockpiles due to new pipeline capacity and strong winter demand.
Lack of consensus in yesterday's FOMC minutes is raising uncertainty over policy and sent the Dow down 0.6 percent to end at its lows at 16,040.
Tapering was assumed to move in $10 billion increments but the appearance of weak economic data had the doves on the FOMC agreeing only to the words "further measured steps" with no dollar figures attached.
On the key interest rates, the hawks at the meeting argued it should be raised sooner than later while the doves stressed the need to keep the rate low if inflation remains below the Fed's 2 percent target. Similarly vague were the Fed's employment goals.
And adding further uncertainty is how the Fed will react to the increasing run of very weak economic data since the January meeting, headed today by another plunge in housing starts and another decline for permits.