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Oil prices lower in Asia on profit taking

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(Globalpost/GlobalPost)

Oil prices turned lower in Asian trade Thursday as data showing Chinese manufacturing picking up strongly in March was outweighed by profit taking, analysts said.

New York's main contract, light sweet crude for delivery in May, dropped 42 cents to $93.08 a barrel in the afternoon and Brent North Sea crude for May delivery shed 22 cents to $108.50.

"Oil is readjusting back to its downtrend on profit-taking," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.

Prices had rallied in New York on Wednesday after the US Department of Energy reported an unexpected decline of 1.3 million barrels in oil stocks in the week ending March 15. Analysts had forecast a rise of 1.7 million barrels.

Manufacturing activity in China, the world's largest energy user, improved this month after expanding at its slowest pace in four months in February, HSBC said Thursday, lifting hopes for a pick-up in the world's number two economy.

The British banking giant's preliminary purchasing managers' index (PMI), a widely watched barometer of the health of the economy, came in at 51.7 for the month from 50.4 in February.

A reading above 50 points to growth while anything below indicates contraction.

"It's not a spectacular number, but we may see prices ticking up slightly. The fact that we are seeing a continued expansion is a good sign of China's economic progress," said Jason Hughes, head of premium client management at IG Markets Singapore.

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http://www.globalpost.com/dispatch/news/afp/130321/oil-prices-lower-asia-profit-taking