Investing.com - Crude oil futures trimmed gains during European morning trade on Thursday, coming off the highest levels of the session following the release of dismal manufacturing data from the euro zone, which added to concerns over the health of the region’s economy.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD90.13 a barrel during European morning trade, adding 0.25%.
It earlier rose by as much as 1.1% to trade at a session high of USD90.81 a barrel. Prices touched USD89.28 a barrel on Wednesday, the lowest since November 1.
Crude came off the session’s high after Markit said that manufacturing activity in the euro zone contracted at the fastest pace since June 2009 in May. Its preliminary manufacturing purchasing managers’ index fell by 0.9 points to a seasonally adjusted 45.0 in May from a final reading of 45.9 in April.
The report came after Markit said that its German manufacturing purchasing managers’ index declined to a seasonally adjusted 45.0 in May from a final reading of 46.2 the previous month.
Reduced levels of output, new orders and employment meant that the headline German manufacturing PMI fell to its lowest since June 2009.
A separate report showed that manufacturing activity in France contracted at the sharpest rate since April 2009 in May, while service sector activity contracted at the same pace from last month
The data came after a report showing that Chinese manufacturing activity remained in contraction territory for the seventh consecutive month in May, fuelling concerns over a deeper-than-expected slowdown in the world’s second largest economy.
Oil traders often use manufacturing numbers as indicators for future fuel demand growth.
A deeper slowdown in China, the world’s second biggest economy, would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, a larger-than-expected build in U.S. oil supplies last week is forcing traders to refocus on the supply and demand picture.
The U.S. Energy Department said in its weekly report that crude oil inventories rose by 0.9 million barrels last week to a total of 382.5 million barrels as of last week, the highest level since August 1990, underscoring fears over a slowdown in oil demand from the U.S.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Oil traders also remained risk adverse after Wednesday’s summit of European Union leaders made little signs of progress in tackling the debt crisis in the region.
Leaders reiterated that they want Greece to remain in the euro area, but urged the country to honor its commitments to austerity measures and the reforms demanded under its bailout program.
Meanwhile, Iran was to hold talks in Baghdad for a second day with the U.S., the U.K., France, China, Russia and Germany amid hopes of progress in resolving a dispute over Iran's nuclear goals.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery shed 0.3% to trade at 105.25 a barrel, with the spread between the Brent and crude contracts standing at USD15.12.
Brent crude, the European benchmark, is nearly 15% off its intraday high of USD128.38 hit on March 1.
A potential loss of Iranian oil supplies has helped underpin strong gains in oil prices during late last year and the first quarter of this year.
But revived talks between Iran and major powers over Tehran's nuclear ambitions, along with rising Saudi Arabian and Libyan output and signs of slower U.S. economic and employment growth, helped pull oil prices back from first-quarter highs.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD90.13 a barrel during European morning trade, adding 0.25%.
It earlier rose by as much as 1.1% to trade at a session high of USD90.81 a barrel. Prices touched USD89.28 a barrel on Wednesday, the lowest since November 1.
Crude came off the session’s high after Markit said that manufacturing activity in the euro zone contracted at the fastest pace since June 2009 in May. Its preliminary manufacturing purchasing managers’ index fell by 0.9 points to a seasonally adjusted 45.0 in May from a final reading of 45.9 in April.
The report came after Markit said that its German manufacturing purchasing managers’ index declined to a seasonally adjusted 45.0 in May from a final reading of 46.2 the previous month.
Reduced levels of output, new orders and employment meant that the headline German manufacturing PMI fell to its lowest since June 2009.
A separate report showed that manufacturing activity in France contracted at the sharpest rate since April 2009 in May, while service sector activity contracted at the same pace from last month
The data came after a report showing that Chinese manufacturing activity remained in contraction territory for the seventh consecutive month in May, fuelling concerns over a deeper-than-expected slowdown in the world’s second largest economy.
Oil traders often use manufacturing numbers as indicators for future fuel demand growth.
A deeper slowdown in China, the world’s second biggest economy, would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, a larger-than-expected build in U.S. oil supplies last week is forcing traders to refocus on the supply and demand picture.
The U.S. Energy Department said in its weekly report that crude oil inventories rose by 0.9 million barrels last week to a total of 382.5 million barrels as of last week, the highest level since August 1990, underscoring fears over a slowdown in oil demand from the U.S.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Oil traders also remained risk adverse after Wednesday’s summit of European Union leaders made little signs of progress in tackling the debt crisis in the region.
Leaders reiterated that they want Greece to remain in the euro area, but urged the country to honor its commitments to austerity measures and the reforms demanded under its bailout program.
Meanwhile, Iran was to hold talks in Baghdad for a second day with the U.S., the U.K., France, China, Russia and Germany amid hopes of progress in resolving a dispute over Iran's nuclear goals.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery shed 0.3% to trade at 105.25 a barrel, with the spread between the Brent and crude contracts standing at USD15.12.
Brent crude, the European benchmark, is nearly 15% off its intraday high of USD128.38 hit on March 1.
A potential loss of Iranian oil supplies has helped underpin strong gains in oil prices during late last year and the first quarter of this year.
But revived talks between Iran and major powers over Tehran's nuclear ambitions, along with rising Saudi Arabian and Libyan output and signs of slower U.S. economic and employment growth, helped pull oil prices back from first-quarter highs.