Last update: 02 May 2023, 00:03 IST
Chinese manufacturing activity fell unexpectedly in April, official data showed on Sunday, the first contraction since December in the manufacturing purchasing managers’ index. (Image: Reuters file)
Brent crude fell $1.88, or 2.3%, to $78.45 a barrel as of 1:28 p.m. EDT (1728 GMT). U.S. West Texas Intermediate (WTI) crude slid $1.90, or 2.5%, to trade at $74.88
Oil prices fell nearly $2 a barrel on Monday after weak economic data from China and expectations of another U.S. interest rate hike outweighed support from oil cuts. supply plans that come into effect this month.
Brent crude fell $1.88, or 2.3%, to $78.45 a barrel as of 1:28 p.m. EDT (1728 GMT). U.S. West Texas Intermediate (WTI) crude slid $1.90, or 2.5%, to trade at $74.88.
Chinese manufacturing activity fell unexpectedly in April, official data showed on Sunday, the first contraction since December in the manufacturing purchasing managers’ index.
“The market is highly dependent on what happens to China, and the most real-time news from the manufacturing sector was a disappointment,” Third Bridge analyst Peter McNally said.
China is expected to be the main driver of oil demand growth this year, he added.
The US Federal Reserve, which meets May 2-3, is expected to raise interest rates by another 25 basis points. The US dollar appreciated against a basket of currencies, making oil more expensive for other currency holders.
“We continue to be at the mercy of sentiment surrounding a Chinese recovery or lack thereof, while the ongoing US backdrop of monetary tightening leaves us in the realm of ‘bad is good’ when it comes to economic data or flow. information,” said Kpler analyst Matt Smith.
Banking fears have weighed on oil in recent weeks and in what is the third major US institution to fail in two months, US regulators seized First Republic Bank this weekend ahead of a deal in which JPMorgan bought most of its assets.
Voluntary production cuts of about 1.16 million barrels per day by members of the Organization of the Petroleum Exporting Countries and their allies, including Russia, a group known as OPEC+, take effect at from May.
Oil prices received some support from US manufacturing activity, which hit a three-year low in April as new orders improved slightly and employment rebounded.
“Crude prices are paring losses on optimism the economy can strengthen now that the banking drama is behind us and mill activity is improving,” said OANDA analyst Edward Moya.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)