Oil futures rangebound as manufacturing outlook weighs, Brent below $103
ecPulse
2014-09-02 07:57AM UTC
Brent held below $103 a barrel on Tuesday amid fresh tensions in Libya, the world`s top oil producer, while new signs of a slowdown in both Europe and China also weighed on the sentiment. West Texas Intermediate was little changed. Economic data released yesterday showed that manufacturing growth in the euro area in August was worse than expected, while the growth in the factory sector in China fell to its lowest level in three months, which raised concerns about demand for oil in the world`s second-largest consumer. As of 03:23 am ET: - WTI for delivery in October fell 0.28% to $95.69 a barrel on the New York Mercantile Exchange - Brent for October delivery fell 0.23% to $102.55 a barrel on the ICE exchange in London Oil futures fell for the second straight month amid ample supplies and buoyant dollar, but analysts expect an uptick in prices this month. Supply gains in the Middle East and Africa continue to pressure prices but the decline in oil prices is expected to see some upside corrections. Analysts believe the European benchmark will not break the $100 level however any corrections will be very limited for the time being. In Libya, the violence reignited between the government and rival armed groups, threatening oil production, although the OPEC member raised its crude exports to 700 thousand barrel per day from May`s low of 155 thousand barrel per day. Geopolitical tensions continue to support oil prices, with the army of Kurdish Iraqi forces closing in on the fighters of the Islamic State on Saturday, in a bid to break the siege of the Sunni insurgency while the U.S. resumes airstrikes in Northern Iraq. Russian President Vladimir Putin called for talks about the "statehood" in the south and east of Ukraine, while his Ukrainian counterpart Petro Poroshenko said his country is ready for a full-scale war with Russia. On the other hand, Iranian President Hassan Rohani said on Saturday that the imposition of new sanctions on Tehran over its nuclear program is dangerous and could affect future negotiations with the U.S. Later today, traders will be watching further manufacturing data from the U.S. the world`s top consumer. A greater acceleration in August, on top of a very solid July, would further lift the manufacturing outlook, but the consensus forecast is expecting a soft deceleration. The Institute for Supply Management`s factory index for August will be due at 1400 GMT, probably slipping to 57.0 compared with July`s reading of 57.1.
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