ALBAWABA – Oil prices slipped Tuesday on disappointing economic data from China, news agencies reported, despite the marginal increase in factory activity in August.
Brent crude futures for November were down $0.51 at $88.49 a barrel by 0933 GMT, according to Reuters, while West Texas Intermediate crude (WTI) October futures slid $0.14 to $85.41 a barrel.
China is the world’s second-largest economy and one of the world’s top oil consumers. But sluggish economic recovery has failed to sustain optimism as Chinese stimulus fall short of expectations.
Even as manufacturing activity picks up in August, the services Purchasing Managers’ Index (PMI) in China has been dropping closer to the contraction tipping point.
Oil prices slip on still-weak China economy - Shtterstock
A private-sector survey on Tuesday also showed that China's services activity expanded at the slowest pace in eight months in August, Reuters reported, amid still-weak demand.
On the other hand, risk-off sentiment dominated the market as the dollar climbed and equities attracted more investments, according to Bloomberg.
A weaker Euro against a stronger dollar weighed on oil prices as well.
However, the gap between the two nearest Brent contracts hit $0.75 a barrel in backwardation, up from $0.58 cents a week ago, signalling bullish expectations, Bloomberg reported. That’s a bullish pattern in which near-term prices command a premium to those further out.
