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Crude oil futures push lower as demand concerns weigh

Published 09/02/2014, 09:47 AM
Crude oil tumbles amid mounting demand worries
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Investing.com - Crude oil futures pushed lower on Tuesday, as Monday's disappointing manufacturing data from China and the euro zone continued to weigh while investors continued to monitor tensions between Russia and Ukraine.

On the New York Mercantile Exchange, U.S. crude oil for delivery in October traded at $94.65 a barrel during U.S. morning trade, down 1.37%.

Futures were likely to find support at $93.45 a barrel, the low from August 28 and resistance at $96.00, the high from August 29 and a more than two-week high.

Oil prices remained under pressure after data on Monday showed that factory growth in China slowed last month. China’s official manufacturing index ticked down to 51.1 from 51.7 in July, while the HSBC manufacturing index slowed to 50.2 from 50.3 the previous month.

Separate reports on Monday also showed that Germany’s manufacturing sector expanded at the slowest pace in 11 months in July, while factory activity in France contracted at the quickest pace in 13 months.

The weak data fuelled concerns over global oil demand.

Elsewhere, market participants continued to monitor developments in Ukraine after European Union leaders threatened over the weekend to impose a new round of sanctions on Russia if Moscow does not scale back its involvement in the conflict in eastern Ukraine.

Existing sanctions have so far not disrupted oil exports from Russia, the world’s second-largest oil exporter.

Investors were also looking ahead to the latest U.S. employment report due for release on Friday, for further indications on the strength of the recovery in the labor market, a key factor in deciding the future path of monetary policy.

Elsewhere, on the ICE Futures Exchange, Brent oil for October dropped 0.94% to trade at $101.81 a barrel, with the spread between the Brent and crude contracts standing at $7.16 a barrel.

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