Oil prices lower on weak Europe, China data

Singapore, Feb 23: Oil prices were lower in Asian trade on Thursday weighed by weak economic data from Europe and China, as well as an increase in US crude stockpiles indicating faltering demand.

New York"s main contract, light sweet crude for delivery in April, was down 47 cents at $105.81, while Brent North Sea crude for April delivery shed 20 cents to $122.70 in morning trade.

“Manufacturing data from China and parts of Europe will have reminded many that clear skies are not forecast anytime soon," IG Markets Singapore said in a commentary.

“Chances have grown that the eurozone will slip into recession taking other casualties with it," it added.

British banking giant HSBC yesterday said China"s manufacturing activity continued to contract in February as export orders weakened, in a further sign that the eurozone crisis and US weakness are hurting demand in the world"s second largest economy.

HSBC"s preliminary purchasing managers" index (PMI) stood at 49.7 in February. A reading above 50 points indicates growth, while a score below indicates contraction.

A PMI for services and industry in Europe compiled by the research firm Markit also sank to 49.7 points from 50.5 points in January, sparking fresh fears that the region is heading for recession.

Analysts said the market is also being weighed down by American Petroleum Institute (API) forecasts that US oil inventories rose 3.55 million barrels last week, indicating weakening demand in the world"s top oil consumer.

AFP