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Crude oil futures decline on China slowdown concerns

Published 08/21/2014, 03:52 AM
Updated 08/21/2014, 03:52 AM
Crude oil futures decline after weak China manufacturing data

Investing.com - Crude oil futures traded near multi-month lows on Thursday, as a disappointing HSBC preliminary reading of China's PMI for the month of August rekindled fears of a slowdown in the mainland.

On the ICE Futures Exchange in London, Brent oil for October delivery shed 0.35%, or 36 cents, to trade at $101.92 a barrel during European morning hours.

London-traded Brent prices fell to $101.07 a barrel on Tuesday, the lowest since June 26, 2013, as concerns over ample global supplies and weak demand weighed.

Data released earlier showed that the preliminary reading of China’s HSBC manufacturing index fell to a three-month low of 50.3 in August from 51.7 in July and well short of forecasts for 51.5.

The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in October dipped 0.23%, or 21 cents, to trade at $93.24 a barrel.

New York-traded oil futures hit $92.62 a barrel on Tuesday, the weakest level since January 15.

Weekly supply data released Wednesday showed that U.S. oil inventories fell by 4.5 million barrels in the week ended August 15, compared to expectations for a decline of 1.2 million barrels.

Investors now looked ahead to the Fed's annual meeting of top central bankers and economists in Jackson Hole, Wyoming, due to begin later Thursday.

The spotlight will be on Fed Chair Janet Yellen, who will speak on Friday in her first appearance at Jackson Hole as head of the U.S. central bank.

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The U.S. Dollar Index rose to an 11-month high after minutes of the Fed’s July meeting published Wednesday showed that some officials believe the strengthening recovery and ongoing improvement in the labor market supports a move towards tightening monetary policy.

Other officials want to see further evidence of economic recovery before moving towards raising rates.

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