Crude for July delivery fell 27 cents, or 0.29%, to $91.70 a barrel on the New York Mercantile Exchange. On Friday, it plunged 2.1% to settle the week at $91.65 a barrel. On the week, Nymex oil futures lost 2.35%, the second consecutive weekly decline.
The ICE dollar index, which measures the greenback against six other global currencies, rose to 83.237 from 82.294 on Friday. The index finished May higher by nearly 2%.
On Monday, the final version of HSBC’s China manufacturing Purchasing Managers’ Index showed activity in the sector contracted in May. The index fell to 49.2 from a preliminary reading of 49.6. The latest reading was also more than a point off from April’s 50.4. A result below 50 signals contraction.
HSBC’s report contrasted with China’s official PMI, released Saturday, which rose to 50.8 in May from 50.6 in April. Monday’s slip in oil prices added to the 1.8% drop on Friday, when news about record-high European unemployment and a decline in U.S. consumer spending in April dented energy-demand prospects.
The oil market later Monday is due to receive May PMI reports for Germany, France, Italy, and the overall euro zone. Ahead of the reports, European Central Bank President Mario Draghi said Monday that the euro area’s economic situation “remains challenging,” and the ECB doesn’t expect much of an improvement before the end of this year.
The ECB on Thursday is expected to yet again downwardly revise its economic-activity forecast for this year. It currently expects a contraction of 0.5%.
OPEC oil ministers at a summit in Vienna agreed, as expected, to keep the output target at 30 million barrels a day for the rest of the year, with many members expressing satisfaction with current price levels of about $100 a barrel for Brent crude.
MCX June crude oil futures are trading down nearly Rs 15 at Rs 5214 per barrel. The counter should face a stiff resistance near Rs 5230 levels today.
Source by Commodity Insights
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