Oil prices rebounded Tuesday after falling steeply in the previous session owing to weak Chinese and US manufacturing and continued worries about the global supply glut, analysts said.

US benchmark West Texas Intermediate (WTI) for September delivery rose 69 cents to $45.86 a barrel compared with Monday’s close.

Brent North Sea crude for September was up 80 cents at $50.32 a barrel in London afternoon deals.

WTI plummeted $1.95 while Brent tumbled $2.69 on Monday, extending sharp losses of more than two percent on Friday.

Analysts said the small rebound was likely to be capped as dealers focused on sluggish manufacturing data from energy guzzlers China and the United States.

A key private economic indicator on the Chinese manufacturing sector, Caixin’s purchasing managers index, showed a plunge in July to a two-year low of 47.8, deeper into contraction territory.

A reading of 50 marks the line between growth and contraction. The official PMI showed a drop to 50.0 in July from 50.2 in June.

In the United States, the Institute for Supply Management’s purchasing managers index showed manufacturing activity cooled to 52.7 in July from 53.5 in June.

“Weakening growth in the global economy piled on the pressure for commodities,” said Bernard Aw, market strategist at IG Markets in Singapore.

“Juxtaposing the waning demand in crude oil with persistent upticks in supply, the overhang seems to be widening,” he added.

Long-running worries about the global supply glut were exacerbated by comments from the Iranian oil minister Bijan Zanganeh on the Islamic republic’s plans to ramp up oil exports once sanctions are lifted, as part of the country’s deal with six major powers to limit its nuclear program.

ALSO READ  New Iranian air defense systems hit all targets

The price of crude has steadily fallen from around $120 a barrel in June last year, largely due to oversupply caused by the OPEC oil cartel’s refusal to trim lofty output levels and surging US shale production.

 

AFP

Share this article:
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Notice: All comments represent the view of the commenter and not necessarily the views of AMN.

All comments that are not spam or wholly inappropriate are approved, we do not sort out opinions or points of view that are different from ours.

This is a Civilized Place for Public Discussion

Please treat this discussion with the same respect you would a public park. We, too, are a shared community resource — a place to share skills, knowledge and interests through ongoing conversation.

These are not hard and fast rules, merely guidelines to aid the human judgment of our community and keep this a clean and well-lighted place for civilized public discourse.

Improve the Discussion

Help us make this a great place for discussion by always working to improve the discussion in some way, however small. If you are not sure your post adds to the conversation, think over what you want to say and try again later.

The topics discussed here matter to us, and we want you to act as if they matter to you, too. Be respectful of the topics and the people discussing them, even if you disagree with some of what is being said.

Be Agreeable, Even When You Disagree

You may wish to respond to something by disagreeing with it. That’s fine. But remember to criticize ideas, not people. Please avoid:

  • Name-calling
  • Ad hominem attacks
  • Responding to a post’s tone instead of its actual content
  • Knee-jerk contradiction

Instead, provide reasoned counter-arguments that improve the conversation.