SINGAPORE- Oil prices extended their losses in Asian trade Tuesday following weak manufacturing figures from China, but they received some support from concerns about the crisis in Ukraine.
The US benchmark, West Texas Intermediate for June delivery, eased seven cents to $99.41 a barrel in afternoon trade while Brent North Sea crude for June dipped seven cents to $107.65.
Trading volumes were thin as markets in Japan and Hong Kong were closed for public holidays.
Singapore’s United Overseas Bank (UOB) said prices fell after a closely watched survey showed China’s manufacturing sector contracted for a fourth consecutive month in April and at a faster pace than initially thought.
British banking giant HSBC said on Monday its purchasing managers’ index (PMI) for China last month came in at 48.1, a tad up from the 48.0 in March but weaker than the 48.3 reported in its preliminary report on April 23.
A figure below 50 indicates contraction, while anything above points to growth.
“Oil was pressured by the Chinese PMI report, adding to worries that the Chinese economy is still losing momentum,” UOB said in a market commentary.
However, losses were tempered by the escalating violence in Ukraine, where the government is battling pro-Russian separatists.
Fighting intensified between government forces and pro-Moscow secessionists on Monday, with Ukraine’s military suffering heavy casualties and Russia warning the violence was putting peace in Europe in peril.
Ukraine is a major conduit for Russian oil and gas exports to Europe, and any escalation of the conflict could disrupt supplies and send prices soaring, analysts say.