West TX Oil Drops Below $46 after China PMI

Oil prices edged lower in early Asian trade on Tuesday after activity in China’s factory sector fell to an 11-month low, stoking worries over the strength of the world’s No.2 economy.  The flash HSBC/Markit Purchasing Managers’ Index (PMI) dipped to 49.2 in March, below the 50-point level that separates growth in activity from a contraction on a monthly basis. Economists polled by Reuters had forecast a reading of 50.6.

Brent crude oil futures were trading down 11 cents at $55.81 a barrel at 10.15 p.m. ET. U.S. WTI crude dropped 20 cents to $47.25 a barrel.  Worries over slowing growth in China’s economy have contributed to a global surplus in oil supplies.

“We expect crude prices to be pressured once again by the weight of some 2 million barrels per day of oversupply in Q2 2015,” energy consultancy FGE said in a note on Tuesday.  The refinery sector has benefited from cheap oil, which has improved margins for oil products such as diesel or jet fuel.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.