Oil prices were under pressure on Friday after U.S. crude entered a bear market in the previous trading session.
U.S. prices are off more than 20% since their highs in June, meeting a common definition of a bear market. Oil rallied earlier this year on expectations that cuts in drilling activity and investment will rebalance the market, but fell back in recent weeks as the global oversupply of crude showed little signs of receding.
“We continue to have concerns that the oil market could be oversupplied for longer than we previously anticipated,” said Jason Gammel, oil analyst at Jefferies.
Brent crude LCOU5, -0.45% the global oil benchmark, fell 0.2% to $55.17 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September CLU5, +0.04% traded up 0.5% at $48.70 a barrel.
Earlier on Friday, Chinese manufacturing data disappointed markets.
The Caixin China Manufacturing Purchasing Managers’ Index’s initial reading stood at 48.2 in July, compared with a final reading of 49.4 in June, Caixin Media Co. and research firm Markit said. The reading is at a 15-month low and was significantly below market expectations.