Crude Prices Drops Amid Chinese Oil Demand Concerns

Crude oil prices were seen trading lower on the last day of the trading week while oil traders express their worries over oil demand from China as reports revealed a contraction in China’s manufacturing sector.

The North American West Texas Intermediate delivery slid 0.55% lower, trading at $97.70 per barrel on the New York Mercantile Exchange as of the time of writing, at the same time Brent crude oil for March settlement fell 0.34% lower to $107.59 per barrel on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $10.01 to WTI.

The Dollar index, which monitors the strength of the greenback against a basket of six major currencies, came in 0.02% higher to 81.100 points.

Crude – Chinese Manufacturing Sector

For the first time in six months, China’s manufacturing sector contracted, highlight the government’s vow to keep the nation’s economy steady.

HSBC’s final PMI for January weakened, standing at 49.5, dropping from the previous reading of 49.6 seen last week. Any reading above 50 indicated the rise in manufacturing activity, while any reading below 50 points a contraction.

The PMI manufacturing report by China Federation of Logistics and Purchasing, which will be released on Saturday, is expected to show that manufacturing activity dropped to 50.5 points in January; compared to the previous reading of 51 points seen in December.

Crude – US GDP

The world’s largest economy expanded by 3.2% at annualize pace, meeting in line with estimates , driven by the housing sector and higher trade receipts, which both rose to its highest in nearly three years.

 

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