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Tuesday, June 6, 2023

Oil prices mixed in Asian trade

Oil prices were mixed in Asian trade Friday as dealers weighed concerns that the Chinese economy may be losing strength against upbeat US stockpiles figures, analysts said.

US benchmark West Texas Intermediate (WTI) for April eased one cent to $102.74 in mid-morning trade, while Brent North Sea crude rose four cents to $110.34 for its April delivery.

Weak Chinese manufacturing data released Thursday has heightened concerns about waning demand from the Asian economic powerhouse, the world’s top energy consumer.

HSBC’s preliminary reading for its purchasing managers’ index (PMI), which tracks manufacturing activity in China’s factories and workshops, contracted in February to its lowest level in seven months.

The index also tumbled in January, losing ground for the first time in six months.

Singapore’s United Overseas Bank said oil prices receded “as traders put more weight on the weak China PMI data against the strong US demand” reflected in latest US stockpiles data.

Ric Spooner, chief market analyst at CMC Markets in Sydney, said investors were still mulling the implications of the Chinese manufacturing figures.

“I think, collectively, the market has decided that the safer option will be to wait on more data from China before they make any downward adjustments to their growth outlook,” he told AFP.

The US Energy Department’s official petroleum stockpiles report released Thursday raised hopes of improved demand after bouts of winter storms and bitter cold gripped large parts of the country.

Commercial crude inventories rose by 1.0 million barrels in the week ending February 14, less than the 1.8 million expected by analysts.

US distillate reserves, which include diesel and heating fuel, fell by 300,000 barrels.

Analysts are also closely monitoring renewed conflicts in oil-exporting countries in Africa, which have given support to Brent prices and raised concerns over the region’s stability.

South Sudan’s key oil hub of Malakal faces fresh fighting as government troops vowed to wrest back control of the town from rebel fighters.


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