September 20, 2012

Oil falls in Asia

SINGAPORE: Oil prices fell in Asia on Thursday after data showed manufacturing activity in the world's largest energy consumer China contracting for the 11th straight month.

New York's main contract, light sweet crude for delivery in October slid 91 cents to $91.07 a barrel and Brent North Sea crude for November delivery fell 34 cents to $107.85.
Crude demand worries were stoked after British banking giant HSBC released data earlier Thursday showing China's manufacturing sector still stuck in a rut, said market strategist for IG Markets Singapore Justin Harper.
"The China data has pushed down commodities after HSBC's flash PMI showed contraction for another month," he told AFP.
"Oil has been on the receiving end of this negativity towards the Chinese economy and more evidence of its continued slowdown. China is a major consumer of oil and any slowdown in its economy worries traders about future demand."
The preliminary reading of the purchasing mangers' index (PMI) for China released by HSBC hit 47.8 this month, a mild improvement from a final reading of 47.6 in August, the bank said in a statement.
But the latest reading marked nearly a year of continuous contraction since November, underscoring broader economic weakness and shrinking demand in key overseas markets.
The index is closely watched as it gauges nationwide manufacturing activity, a key sector of the world's second-largest economy. A PMI reading above 50 indicates expansion, while anything below 50 points to contraction.
China's official PMI figure for August released earlier this month hit a nine-month low of 49.2.



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