Forexpros – Crude oil futures edged down on Monday, turning modestly lower as concerns over the global economy lingered following the release of a pair of conflicting reports on Chinese manufacturing activity, while oil traders continued to monitor developments between Iran and the West.
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD102.85 a barrel during European morning trade, shedding 0.17%.
It earlier rose by as much as 0.26% to trade at a session high USD103.58 a barrel.
Oil prices were higher during early Asian trade as market participants cheered a report showing Chinese manufacturing gained momentum in March.
The state-affiliated China Federation of Logistics and Purchasing said Sunday that its purchasing managers index rose 2.1 points to an 11-month high of 53.1 in March, up from February’s 51.0. A reading above 50 signifies expansion.
However, a separate report from HSBC showed that manufacturing activity in the Asian nation contracted for the fifth consecutive month and recorded its lowest average reading in three years during the first quarter.
The HSBC PMI dipped to a four-month low of 48.3 last month, down from 49.6 in February.
The government-backed PMI is skewed to large enterprises and more affected by seasonality, with the gauge usually climbing after the Lunar New Year holiday, HSBC said in its release.
The conflicting data was not enough to ease concerns about a potential hard landing for the world’s second biggest economy.
China is the world’s second largest oil consumer after the U.S. and has been the engine of strengthening demand. Investors often use manufacturing numbers as indicators for future fuel demand growth.
Meanwhile, markets continued to monitor tensions between Iran and the West and a potential disruption to oil supplies from the region.
The Obama administration said Friday that world oil supplies were sufficient to proceed with sanctions on banks in countries that import Iranian oil.
U.S. President Barack Obama was required by law to determine by March 30, and every six months after that, whether the price and supply of non-Iranian oil are sufficient to allow consuming nations to “significantly” cut their purchases from Iran.
Obama’s decision cleared the way for the imposition of congressionally mandated sanctions, according to a memorandum released by the White House.
The law allows banks that settle petroleum-related transactions through Iran’s central bank to be cut off from the U.S. banking system.
The stand-off between Iran and Western countries has dominated sentiment in the oil market in recent months.
There are fears that the escalating rift over Tehran’s nuclear program could lead to an oil-export halt, a disruption to shipping traffic in the Strait of Hormuz or military conflict, which could send oil prices skyrocketing.
Iran produces about 3.5 million barrels of oil a day, making it the second-largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery was flat to trade at 122.86 a barrel, with the spread between the Brent and crude contracts standing at USD20.01, the most since October 4.
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