Brent crude rises to $108 per barrel

PTI Singapore | Updated on March 12, 2018

Oil prices rose in Asian trade today, with demand boosted by a weaker dollar but lingering concerns over Chinese economy capped the gains, analysts said.

New York’s main contract, West Texas Intermediate (WTI) crude for delivery in September, was up five cents at $105.54 a barrel in mid-morning trade, while Brent North Sea crude for September contract added 12 cents to $107.77.

“We’re seeing modest gains and the pricing is supported by a slightly weaker dollar,” said Victor Shum, Managing Director at consultancy IHS Purvin and Gertz.

Dollar-priced oil becomes cheaper when the greenback weakens, bolstering demand and pushing prices higher.

Shum added that the gains were capped by concerns over slowing Chinese economy, the second biggest in the world.

“The China factor is important and there’s just more and more data showing that the economy is slowing,” he said.

“China is expected to account for a majority of oil demand going forward and with a slowing Chinese economy, gains in oil futures will be limited.”

The latest data out of China on Wednesday showed the country’s manufacturing activity contracted to an 11-month low in July, according to an HSBC survey.

It was the first evidence of the Asian economic giant losing further momentum in the third quarter.

HSBC said its preliminary purchasing managers’ index (PMI) hit 47.7 this month, down from a final 48.2 in June and the lowest since August.

The index tracks the manufacturing activity in China’s factories and workshops and is a closely watched gauge of the health of the economy. A reading below 50 indicates contraction, while anything above signals expansion.

China’s economy has been weakening this year, with growth in the April-June period dipping to 7.5 per cent, from 7.7 per cent in the first quarter and 7.9 per cent in October-December.

Published on July 26, 2013

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