Crude oil prices dipped in Asia on Tuesday ahead of industry data on U.S. stockpiles and despite a tick up in manufacturing data out of China.
In China the June Markit Flash Manufacturing PMI rose to 49.6, better than May’s final of 49.2 and the first without HSBC following the end of their distribution deal.
“The latest Flash China Manufacturing PMI survey provided a mixed bag of data in June,” said Annabel Fiddes, Economist at Markit.
“On the one hand, the sector shows signs of improvement as output stabilised amid a slight pick up in total new work, while purchasing activity also rose slightly over the month. On the other hand, manufacturers continued to cut their staff numbers, with the latest reduction the sharpest in over six years. This suggests that companies have relatively muted growth expectations as demand conditions both at home and abroad remain relatively subdued. The data add to evidence that the sector has lost growth momentum in Q2 as a whole, and suggests that the authorities may step up their efforts to stimulate growth and job creation in the second half of the year.”
On the New York Mercantile Exchange, WTI crude for August delivery fell 0.24% to $60.23 a barrel. The American Petroleum Institute later Tuesday will release its estimates of crude and refined product stocks in the U.S. at the end of last week. On Wednesday, more closely-watched figures from the U.S. Department of Energy are due.
Earlier, Greece’s Prime Minister, Alexis Tsipras told reporters late Monday that proposals submitted to creditors to resolve the country’s immediate debt obligations are aimed at fairness and that they should be adopted.
“I will use a term the EU leaders are using: the ball is now on EU leadership court,” he concluded.
He made the remarks after the Emergency Eurozone summit in Brussels, adding that deliberations will continue for “a few more days” in order to secure the best possible deal for Greece.
European Commission President Jean-Claude Juncker earlier said Greece’s proposals are a step in the right direction and that he was confident a deal could be finalized this week.
“I am convinced that we will come to a final agreement this week, for the simple reason that we have to find an agreement this week,” he said. “We cannot play, as is said in football, for extra time any longer.”
Overnight, crude futures inched up on Monday paring earlier losses late in the session, amid increased optimism in Greek Debt negotiations and speculative trading in the energy markets from hedge funds.
On the Intercontinental Exchange (ICE), Brent crude for August delivery rose 0.34 or 0.55% to $63.36 a barrel on Monday.
Hedge fund and other money market fund investors trimmed WTI short wagers 4.3% for the five-day period that ended on June 16, while reducing long wagers by 0.2%, resulting in a 0.8% gain in net long positions, according to data compiled by the U.S. Commodities Futures Trading Commission. The spread between December and August WTI futures stood at 1.48, as July futures expired on Monday.
Energy traders remain focused on a glut of oversupply in global markets, following market-moving comments from Saudi Arabia oil minister Ali Al-Naimi last week. Weeks after Opec elected to maintain its production ceiling at its current level above 30 million barrels, Al-Naimi said his country has roughly 2 million barrels of daily reserves and is ready to increase production if demand spikes.
At the same time, the U.S. Energy Information Administration (EIA) projects U.S. output to average 9.4 million barrels per day in 2015, before declining to 9.3 million bpd. In May, Opec pumped its highest level of crude since October, 2012, in an effort to depress prices and dominate market share.
On Friday, oil services firm Baker Hughes (NYSE:NYSE:BHI) said the U.S. oil rig count for the week of June 12 fell by four to 631, marking the 28th consecutive week of weekly declines. U.S. oil rigs are now at their lowest level since August, 2010.
[“source – investing.com”]