Weakening demand outlook pressured Brent crude oil prices on Monday and caused the commodity to drop below $100 for the first time in a month. Brent traded at $99.93 at 8:00 GMT on Monday morning after poor data from China suggested global demand wouldn't rise anytime soon.
CNBC reported that China's HSBC Purchasing Managers' Index fell to 49.2 in May. The drop was attributed to decreases in both domestic and external demand. Chinese PMI for the non-manufacturing sector also dropped to its lowest level since September 2012 and came in at 54.3.
Brent hasn't seen any lift from seasonal demand increases, due largely to the fact that there is more than enough supply to meet the current consumption.
At the Organization of the Petroleum Exporting Countries meeting on Friday, oil ministers decided to maintain the group's output target of 30 million barrels per day for the rest of the year. However, the sharp drop below $100 in Brent prices will be troubling to some of OPEC's members, as $100 is their budget breakeven point.
Supply fears could help mitigate some of Brent's losses as news that Iran is planning to start a reactor next year has reignited tension between Tehran and the West over the nation's nuclear technology.
If Iran meets its target and starts a reactor, many fear the nation could use it to arm an atomic bomb. Moving forward, governments will be watching Iran's Arak heavy-water research plant for new developments and the timetable for the plant's start up.
BY Laura Brodbeck
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Brent Slides Below $100 On Chinese Data
Published 06/03/2013, 08:38 AM
Updated 05/14/2017, 06:45 AM
Brent Slides Below $100 On Chinese Data
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