Crude oil futures tumbled to open the week, with analysts pointing to weak Chinese manufacturing data and expectations regarding Saudi Arabia’s price announcements as the most likely culprits for the move.
MarketWatch reported that on the New York Mercantile Exchange, light, sweet crude futures for delivery in December came in at $80.23 a barrel, down $0.31 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange dropped $0.17 to $85.69 a barrel. A report from Bloomberg added that WTI for December delivery rose $0.18, up to $80.72 a barrel in electronic trading on the New York Mercantile Exchange.
China’s official manufacturing PMI dropped to a five-month low of 50.8 over the last weekend, down from 51.1. This seems to be consistent with the flagging nature of the overall Chinese economy where a growth slowdown is expected.
“We saw better-than-expected industrial production and exports data last month, but China’s economy may be showing its weakness again,” Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul, said today in a phone interview with Bloomberg.
Additionally, investors are worried that Saudi Arabia, a member of OPEC, will slash prices again, raising fears of a price war that will cause crude oil prices to fall even further.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.