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article imageOil market mixed amid weak Chinese data

By AFP     Mar 24, 2014 in Business

Global oil prices diverged on Monday as dealers digested news that Chinese manufacturing activity shrank in March to an eight-month low.

New York's main contract, West Texas Intermediate (WTI) for delivery in May delivery, firmed 18 cents to $99.64 a barrel.

Brent North Sea crude for May dipped seven cents to $106.85 a barrel, from Friday's closing level.

“Brent crude has fallen back ... as poor Chinese PMI data continues to worry traders that demand in the world’s largest economy is going to slow over the coming months," said analyst Joe Conlan at consultancy Inenco.

"China’s manufacturing activity shrank for a third straight month in March according to a preliminary survey released ahead of next week’s official data. There is a feeling in the market that with the economy slowing in China, there could be a move from the Beijing Government to stimulate the government.

HSBC said preliminary readings showed Chinese factory activity had contracted in March, adding to concerns about the world's number two economy.

The banking giant's flash purchasing managers index (PMI) came in at 48.1, an eight-month low and down from 48.5 in February. A final figure will be released next week.

Anything below 50 indicates contraction while a figure above points to expansion.

The index is a closely watched gauge of the health of the Asian economic powerhouse and key driver of global growth.

Adding to selling pressure was a stronger dollar that makes oil denominated in the US unit more expensive for traders using rival currencies, dampening demand.

The dollar rallied last week after Federal Reserve chief Janet Yellen suggested US interest rates could be hiked early next year.

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