INV: Crude oil futures off the lows after U.S. service-sector data
Investing.com - Crude oil futures remained lower on Monday, albeit off the worse levels of the session, after data showed that service sector activity in the U.S. grew at a significantly faster rate than expected in July.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD106.34 a barrel during U.S. morning trade, down 0.55%.
Nymex oil prices fell to a session low of USD105.71 a barrel earlier in the day.
The U.S. Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 56.0 in July from a reading of 52.2 in June. Analysts had expected the index to inch up to 53.0 last month.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
Separately, China’s HSBC Purchasing Managers' Index for the services industry for July released earlier read 51.3, unchanged from June’s reading.
The official government reading for non-manufacturing PMI in July released over the weekend was 54.1 compared with 53.9 in June.
Market players now looked ahead to data scheduled later in the week on China’s trade balance as well as a report on inflation and industrial production, amid ongoing concerns over the Asian nation’s economic outlook.
China is the world's second largest oil consumer after the U.S. and manufacturing numbers are used as indicators for fuel demand growth.
The September contract settled down 0.9% at USD106.94 a barrel on Friday, after data showed the U.S. economy created fewer jobs than expected in July, casting more doubts over the strength of the U.S. economy and the need for further stimulus.
The Department of Labor said the U.S. economy added 162,000 jobs in July, less than the 184,000 increase forecast by economists. June's figure was revised down to 188,000 from a previously reported gain of 195,000.
The unemployment rate ticked down to 7.4% from 7.6% in June, due in part to more people leaving the labor force.
The data came amid growing uncertainty over the future of the U.S. central bank’s stimulus program, after the Fed said on Wednesday that it would keep buying USD85 billion a month in mortgage and Treasury securities and gave no hint of plans to taper its bond-buying program.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery fell 0.9% to trade at USD107.95 a barrel, with the spread between the Brent and crude contracts standing at USD1.61 a barrel.
