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.
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