Brent crude reversed early losses to trade back towards $57 a barrel on Tuesday, as a weaker dollar overshadowed signs of slowing growth in China and Saudi Arabian oil production close to an all-time high.
The dollar slipped 0.25 percent against the euro, extending losses from the previous session and providing a boost to dollar-priced commodities, which tend to move inversely to the U.S. currency.
Brent futures LCOc1 for May delivery were trading up 64 cents at $56.56 by 0620 EDT, while U.S. crude CLc1 rose 60 cents to $48.05 a barrel. Its discount to Brent CL-LCO1=R widened to $8.51 a barrel.
Gains were capped by data showing factory activity in China, the world’s second-largest economy and top oil importer, slipped in March.
The flash HSBC/Markit Purchasing Managers’ Index came in at 49.2, below the 50-point level that separates growth from contraction. Economists polled by Reuters had forecast a reading of 50.6.
The Chinese data followed comments from OPEC kingpin Saudi Arabia that it is pumping around 10 million barrels of crude per day, close to an all-time high and some 350,000 bpd above the figure it gave OPEC for its February output.
OPEC’s decision to fight for market share rather than cutting output has contributed to a halving in oil prices since June as the global surplus of oil supplies has grown.
via Reuters
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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