FRX: Crude oil dips as growth worries counter stimulus hopes
Forexpros - Crude oil futures edged mildly lower during U.S. morning hours on Monday, as concerns over the outlook for global growth countered hopes for fresh stimulus measures by policymakers in the U.S., China and Europe.
Trade looked likely to remain thin, with markets in the U.S. closed for the Labor Day holiday.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD96.33 a barrel during U.S. morning trade, shedding 0.15%.
Prices were stuck in a tight range of USD96.02 a barrel, the daily low and a session high of USD96.54 a barrel. Prices hit a four-day high of USD96.91 a barrel on Friday.
Oil prices came under pressure after data released earlier showed that China’s HSBC Flash Purchasing Managers Index fell to a 41-month low of 47.6 in August from a preliminary reading of 47.8, as new orders slumped in the face of weakening global demand. The index stood at 49.3 in July.
The weak manufacturing report came after the China Federation of Logistics and Purchasing said over the weekend that its Purchasing Managers Index contracted for the first time in nine months in August, falling to 49.2 from 50.1 in July.
The disappointing data added to ongoing hopes policymakers in Beijing will introduce fresh stimulus measures to boost growth in the world’s second largest economy.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Concerns over the outlook for growth in the euro zone also weighed after revised data showed that the euro zone’s manufacturing sector contracted for the 13th month in a row in August.
Markit said the bloc’s manufacturing purchasing managers’ index rose to 45.1 from July's 37-month low of 44, but remained well below the 50 mark that separates growth from contraction.
Market sentiment remained supported by expectations that the European Central Bank is working on measures to help stabilize the euro zone's sovereign debt markets ahead of its upcoming meeting on Thursday further supported gains.
Mounting speculation the Federal Reserve was moving closer to introducing fresh measures to stimulate growth in the U.S. economy also helped limit losses.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, on Friday, Fed Chief Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.
Oil traders were looking ahead to U.S. government data on non-farm payrolls on Friday, which will allow investors to gauge the strength of the labor market and the need for additional easing.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery eased up 0.05% to trade at USD114.62 a barrel, with the spread between the Brent and crude contracts standing at USD18.29 a barrel.
