The price of crude oil was little changed Wednesday morning as traders await cues from the official inventories data due out later today. Prices were under pressure following downbeat manufacturing data out of China, the world's second largest energy consumer.
China's factory activity fell to the weakest level in eleven months in July amid a continued slide in new orders and faster destocking, preliminary results of a survey by Markit Economics and HSBC revealed. The purchasing managers' index, an indicator of the country's factory sector performance, fell to 47.7 in July from 48.2 in June. An index reading below 50 suggests deterioration in activity.
Light Sweet Crude Oil (WTI) futures for September delivery, eased $0.03 to $107.20 a barrel. Yesterday, oil settled marginally higher ahead of the weekly oil inventories data and with the dollar weakening against a basket of major currencies.
Tuesday after the market hours, the API said US crude oil inventories shed 1.4 million barrels and gasoline stocks were down 890,000 barrels in the weekended July 19.
This morning the U.S. dollar was leveling off from its one-month low versus the euro and sterling, while ticking lower against the Swiss franc and the yen.
In economic news, an indicator of euro zone private sector activity increased more than expected in July, a preliminary report from Markit Economics showed. The flash composite output index, that measures business activity in both manufacturing and services sectors, rose to an 18-month high of 50.4 in July from 48.7 in June. Economists had forecast the index to rise to 49.1.
German private sector business activity rose at the fastest pace in five months in July, preliminary results of a survey by Markit Economics showed. The composite output index, that measures performance of both manufacturing and services, rose to a five-month high of 52.8 in July from 50.4 in June. Readings above 50 indicates expansion in activity.
Traders will look to the new home sales report for June, from the US Commerce Department, due out at 10 a.m. ET. Economists expect new home sales to come in at a seasonally adjusted rate of 481,000 units in June compared to a 476,000-rate in May.
Today during trading hours, the EIA will release its US crude oil inventories report for the weekended July 19. Analysts expect crude oil inventories to dip 2.10 million barrels and gasoline stocks to add 900,000 barrels last week.
