Accommodation In Santa Clarita - Oil Prices Decline After Weak China Data

Source - http://www.marketwatch.com/
By - Carla Mozee
Category - Accommodation In Santa Clarita
Posted By - Hampton Inn Santa Clarita

Accommodation In Santa Clarita

Crude for July delivery CLN3 -0.30%  fell 16 cents, or 0.2%, to $91.81 a barrel, with some pressure on the dollar-denominated commodity coming from strengthening U.S. dollar.

The ICE dollar index DXY -0.11%  , which measures the greenback against six other global currencies, rose to 83.237 from 82.294 on Friday. The index finished May higher by nearly 2%.

 On Monday, the final version of HSBC’s China manufacturing Purchasing Managers’ Index showed activity in the sector contracted in May. The index fell to 49.2 from a preliminary reading of 49.6. The latest reading was also more than a point off from April’s 50.4. A result below 50 signals contraction.

China is a key consumer of oil, and the reported contraction in the country’s manufacturing sector came at a time of general concern about a slowdown in China and its impact on energy demand.

HSBC’s report contrasted with China’s official PMI, released Saturday, which rose to 50.8 in May from 50.6 in April.

Monday’s slip in oil prices added to the 1.8% drop on Friday, when news about record-high European unemployment and a decline in U.S. consumer spending in April dented energy-demand prospects.

The oil market later Monday is due to receive May PMI reports for Germany, France, Italy, and the overall euro zone.

Ahead of the reports, European Central Bank President Mario Draghi said Monday that the euro area’s economic situation “remains challenging,” and the ECB doesn’t expect much of an improvement before the end of this year.

 The ECB on Thursday is expected to yet again downwardly revise its economic-activity forecast for this year. It currently expects a contraction of 0.5%.

But industry and investor worries about lackluster energy demand didn’t sway OPEC on Friday from sticking to its current oil-production target.

OPEC oil ministers at a summit in Vienna agreed, as expected, to keep the output target at 30 million barrels a day for the rest of the year, with many members expressing satisfaction with current price levels of about $100 a barrel for Brent crude.

But OPEC’s current target “has no teeth because there are no individual country allocations within the quota,” Simmons & Company International head of research Jeff Dietert wrote Friday. “Our view is that all nations, aside from Saudi Arabia, are essentially producing at max capacity anyway.”

July futures for benchmark Brent crude oil UK:LCON3 -0.36%  on Monday fell 16 cents, or 0.2%, to $100.23 a barrel. Brent ended May with a loss of 1.6%.