IV:Crude oil swings between gains and losses on China PMI data
Investing.com - Crude oil futures fluctuated between small gains and losses on Monday, as investors digested a pair of disappointing reports on the Chinese manufacturing sector.
Ongoing expectations the Federal Reserve will start to unwind its bond purchasing program in the coming months also weighed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD96.65 a barrel during European morning trade, little changed on the day.
New York-traded oil prices held in a range between USD96.08 a barrel, the daily low and a session high of USD96.87 a barrel.
China’s official manufacturing purchasing managers’ index came in at 50.1 in June, in line with expectations, following a reading of 50.8 in May.
Separately, China’s HSBC manufacturing PMI fell to a nine-month low of 48.2 in June, down from a preliminary reading of 48.3 and further below the 50.0 level that separates contraction from expansion.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Oil traders now looked ahead to this week’s highly-anticipated U.S. nonfarm payrolls data for indications of how the recovery in the U.S. labor market is progressing.
Any improvement in the U.S. economy was likely to reinforce the view that the Federal Reserve will begin to taper its bond purchase program in the coming months.
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.
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 August delivery eased up 0.1% to trade at USD102.28 a barrel, with the spread between the Brent and crude contracts standing at USD5.63 a barrel, the narrowest level since January 2011.
The gap between the contracts has been on the decline in recent weeks, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.
