Crude At 2013 Low On China PMI And OPEC, Focus On Data And US Budget
ICN.com | Mar 01, 2013 04:08AM ET
Crude oil fell below the $91.50 level, and is heading for a second weekly decline as China’s manufacturing expanded less-than-expected and OPEC production rose for the first time in six months while the automatic spending cuts in the U.S. loom.
China’s manufacturing PMI fell to 50.1 in Feb., the lowest since Sep. 2012, compared with the expected 50.5 as overseas demand for Chinese goods remained weak. The uncertain recovery in China, the world’s second oil consumer, triggered over demand for oil.
Lat month, crude output in OPEC rose 97,000 barrels to an average of 30.7 million a day, as the gain in Libya’s output after the reopening of the Zueitina export terminal, outweighed a cut by Saudi Arabia.
Crude is trading as of this writing around the $ 91.85 a barrel level, compared with the opening at $91.78, while the highest is at $91.93 and the lowest is at $91.44
Also weighing on prices is the looming automatic spending cuts in the U.S. worth $85 billion, set to be realized on March 1 unless lawmakers reach an agreement. This could weaken the economic recovery and dent demand on fuel from the world`s largest oil consumer.
On Thursday, the International Monetary Fund (IMF) said that the automatic spending cuts in the U.S. might cut at least 0.5% of 2013’s economic growth, which is expected to rise only 2% this year if the cuts are fully implemented.
Brent is trading as of this writing around the $ 110.87 a barrel after falling 0.46%
Besides the U.S. fiscal woes, economic data remains firmly in focus. Germany will release its PMI manufacturing, the eurozone will release its employment report, Canada will release its GDP while the U.S. will release its ISM manufacturing and personal spending report.
Confidence also weakened following Thursday’s disappointing GDP data from the United States as the fourth quarter growth grew 0.1%, below the 0.5% growth expected. The eurozone remains weak amid the continued political deadlock in Italy.
Natural gas is trading as of this writing at $ 3.498 per 1,000 cubic feet after rising 0.34%
Heating oil is trading at $ 2.9502 a gallon after falling 0.34%
Gasoline is trading at the time of writing at $ 3.0938 a gallon after falling 0.58%
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