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Oil prices slide on more weak China data

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(Globalpost/GlobalPost)

World oil prices sank on Tuesday after another batch of disappointing economic data fuelled demand concerns in top global energy consumer China, analysts said.

Brent North Sea crude for delivery in June dropped 72 cents to $99.67 a barrel in London early afternoon deals.

New York's main contract, light sweet crude for June, shed 57 cents to $88.62 a barrel.

"Crude oil prices came under renewed pressure on Tuesday following disappointing Chinese manufacturing and industrial data that hurt market sentiment, confirming the view that when 'China coughs, the rest of the world catches a cold'," said Sucden analyst Myrto Sokou.

Banking giant HSBC said preliminary data showed manufacturing activity in China slowed in April due to sluggish foreign demand.

Its initial purchasing managers' index (PMI) for the month came in at 50.5, from a final 51.6 in March. A reading above 50 indicates growth and anything below points to contraction. The final result will be announced on May 2.

"New export orders contracted after a temporary rebound in March, suggesting external demand ... remains weak," Qu Hongbin, a Hong Kong-based economist with HSBC, said in a release.

The result comes just over a week after official data showed the economy grew 7.7 percent in the January-March quarter, slower than the 7.9 percent in the previous three months and below the 8.0 forecast.

"Traders are reading the Chinese PMI data in line with last week's GDP (gross domestic product) figures, giving oil some pressure on the downside," David Lennox, resource analyst at Fat Prophets in Sydney, told AFP.

"There are also concerns over oil demand, as strong growth in China was expected to offset weaker demand in the United States and Europe."

China is the world's biggest energy-consuming nation and the health of its economy is closely watched by oil traders.

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http://www.globalpost.com/dispatch/news/afp/130423/oil-prices-slide-more-weak-china-data