In Asian trade, Crude prices slipped on Tuesday as slumping manufacturing output in the world's major economies weighed on markets, analysts said.
Light sweet crude for August delivery, retreated 17 cents to $83.58 a barrel n New York's main contract and Brent North Sea crude for delivery in August shed six cents to $97.28.
Data from the US Institute for Supply Management released late Monday showed its June manufacturing index falling to 49.7 percent, from May’s 53.5 percent.
Since July 2009, it was first time the index had fallen below the 50 percent breakeven point between contraction and growth, and was a grim reminder of the economic problems in the world’s largest oil consumer.
Weak manufacturing data from key global economies led to concerns among traders of a corresponding erosion in energy demand, IG Markets said in a report.
“Faltering manufacturing output across the world’s biggest economies spooked some investors,” it said. “The US, China, Japan and Europe are all seeing their lowest levels for up to three years.”
In China, figures from British bank HSBC showed manufacturing activity in the world’s largest energy consumer contracting for the eighth consecutive month in June, despite an interest rate cut.
The bank’s purchasing managers’ index (PMI) for China, which gauges the manufacturing sector, fell to 48.2 in June from 48.4 in May
Japanese manufacturing activity also shrank in June for the first time in seven months, data from London-based research firm Markit showed Friday, while their eurozone numbers showed output unchanged from a month ago and at its lowest level since June 2009.
HY Markets in a daily market review have given a bearish outlook for crude oil. It said a higher range close of Oil on Monday sets the stage for a higher opening on Tuesday. Technical charts show stochastics and the Relative Strength Index ( RSI) have turned bearish hinting that a short term top might be in or is near.
“Multiple closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted. If it extends the rally off June's low, February's high crossing is the next upside target.”
US WTI crude oil closed at $83.75 a barrel on Monday. US Crude Oil Support: $82.37, 81, 79.92 per barrel, Resistance $84.82, 85.90 and 87.27.
SOURCE : Commodityonline.com
