LONDON: Brent crude oil prices dipped yesterday as manufacturing growth faltered in Europe and China at a time of ample supply, although the risk of production setbacks remained high in Libya where the government has lost control of most of the capital.
Eurozone manufacturing growth slowed more than expected last month and factory activity in several key countries appeared to be stagnating. French factory output fell at its fastest in 15 months in August.
Chinese factory growth slipped to a three-month low in August as foreign and domestic demand cooled, and the country’s huge construction sector is also seeing a slowdown, muddying the outlook for demand from the world’s key consumer of most commodities.
“In China, diesel demand growth has been pressured by a slowdown in construction activity linked with the ongoing property market correction, which our economists expect to continue,” Barclays said in its latest Oil Market Outlook.
“Indian oil demand is growing faster than that of China so far this year,” it added.
Brent crude was 13 cents lower at $103.06 a barrel by 1410 GMT. US crude traded 30 cents lower at $95.66 a barrel, although floor trading in the United States is closed on Monday for the Labor Day holiday. “Crude prices appear to have stabilised,” said Michael Wittner, oil analyst at French bank Societe Generale.
“However, there are significant factors that will prevent a near-term price recovery,” he added. “Exports of Libyan light sweet crude are growing, and increasing volumes of crude are being placed in storage, which will maintain downward pressure.”
Libya’s oil production has increased in recent months, rising to 700,000 barrels per day (bpd), state-run National Oil Corp (NOC) said on Sunday, putting it 50,000bpd higher than levels reported early last week.
Reuters
