SINGAPORE: Oil prices fell further in Asia on Monday, hurt by a slump in the manufacturing sector in China, the world’s top energy consuming nation.
A strong dollar and signs of increasing US oil production added pressure on prices, which have already been depressed by a global crude oversupply, analysts said.
US benchmark West Texas Intermediate (WTI) for September delivery fell 20 cents to $47.94 and Brent crude for September tumbled eight cents to $54.54 in afternoon trade.
“The strengthening of the US dollar, weak manufacturing data from China and rise in the US rig count added to the woes of a weak crude market,” said Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at professional services organisation EY.
An independent survey on Friday showed a key gauge of Chinese manufacturing activity tumbled to a 15-month low in July, throwing a pall over growth in the world’s second-largest economy.
The Caixin Purchasing Manager’s Index (PMI), which tracks activity in factories and workshops, is seen as a key barometer of the country’s economic health.
In a sign of drillers ramping up production, US producers added 21 oil rigs last week, according to oil services firm Baker Hughes.
Also adding to downward pressure on prices is expectations the US Federal Reserve will start raising interest rates before the end of the year, strengthening the greenback and making oil, which is priced in dollars, more expensive to holders of weaker currencies.