Crude oil prices declined Wednesday as sentiment was dampened after official data showed a slowdown in China's nonmanufacturing activity.
Light sweet crude for the November delivery declined 0.18 percent or 17 cents to $91.72 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours. Brent crude oil futures for the November delivery fell 0.41 percent or 46 cents to $111.11 a barrel on the ICE futures exchange in London.
Data released by the National Bureau of Statistics and China Federation of Logistics and Purchasing showed that China's services activity declined in September compared to the previous month, increasing the concerns over the slowdown in the world’s second largest economy. The nonmanufacturing Purchasing Managers' Index (PMI) fell to 53.7 in September down from 56.3 in August.
The data came just two days after an official report showed that Chinese manufacturing activity shrank for the second straight month in September. Disappointing reports on both manufacturing and nonmanufacturing activity sparked concern over growth slowdown in the world's second largest oil consumer.
“It's hard to get bullish when the numbers are so bad, especially manufacturing reports in China and the euro zone. But prices are not going to fall that far, as the situation between Iran and Israel will keep the heat under the market until the end of the year," Tony Nunan, an oil risk manager at Mitsubishi Corp, told Reuters.
On Tuesday, crude futures ended lower after the American Petroleum Institute said inventories had increased by 462,000 barrels last week. Light sweet crude for the November delivery fell 0.6 percent or 59 cents and settled at $91.89 a barrel on the New York Mercantile Exchange while Brent crude for the November delivery settled at $111.57 a barrel.
When the markets open on Wednesday, the U.S. Energy Information Administration (EIA) is due to report weekly inventory data that are expected to show the rise in stockpiles by 1.53 million barrels last week.
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