Oil prices down amid rising rig count, soft US economic data

Prices have lost 15% this year.

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The official China’s manufacturing purchasing managers’ index published on Saturday dipped to 50.0 last month from 50.2 in June, as new orders declined.

Brent crude oil slipped $1.17 to $51.04 a barrel, while the US crude fell 75 cents to $46.37, Reuters reported.

Brent LCOc1, the global benchmark for crude, settled down $2.69, or 5.2 percent, at $49.52 a barrel.

“A retest of Brent crude’s 2015 low around $45 per barrel looks inevitable given current ample market supply and intensifying bearish market sentiment towards prices”, the firm said, although it added that it expected modestly higher prices in 2016 as prices above $60 a barrel were needed for most U.S. shale oil drillers to be profitable.

Crude oil extended losses on Monday on worries of oversupply as the Organization of the Petroleum Exporting Countries pumped at record levels in July, while weak Chinese data stoked concerns about slower growth at the world’s second largest oil consumer.

The number of rigs exploring for oil in the U.S. rose by five last week to 664, according to oilfield services company Baker Hughes Inc.

Analysts said the small gains in Asian trading were likely to be capped as dealers focused on sluggish manufacturing data from energy guzzlers China and the United States. A widely-watched measure of China’s manufacturing sector earlier declined to a two-year low. A level under 50 indicates a contraction in activity.

Global sanctions imposed to force Iran to curb its nuclear program have halved its oil exports to just over 1 million bpd since 2012, and hammered its economy.

The data “suggests U.S. producers are coming to the point where they start considering growth, at least at the margin” said analysts at Deutsche Bank.

Nymex reformulated gasoline blendstock for September-the benchmark gasoline contract-fell 1.6% to $1.74 a gallon.

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Biman Mikherji contributed to this article.

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