Oil down on China numbers, futures point to down day
Oil may have been up 8% yesterday, but it all but reversed its gains overnight as fresh worries on China threaten to bring down the local market today.
WTI crude finished up overnight at $US45.41 ($A64.71) per barrel, down 7.7% on yesterday’s price, which in turn benefited from a gain of 8.8% on fresh comments from OPEC suggesting it could come to the table on constraining output.
Yesterday’s slide pertained to negative numbers from China, as its official factory gauge fell to three-year lows.
The factory gauge is a key economic indicator of factory activity in China, and worried oil traders as the low number was seen as a sign that China may order less oil for its factories over the coming months.
However, the loss also hinted at broader macroeconomic concerns.
“China’s been a concern over the past several months for a lot of money managers out there in the marketplace,” director of managed futures at brokerage iiTrader, Oliver Sloup, was quoted by The Wall Street Journal as saying.
Meanwhile, Bloomberg said the numbers showed that the factory sector in China had yet to respond to official market stimulus.
Last week the People’s Bank of China lowered benchmark interest rates for the fifth time since November – but it doesn’t seem to be sparking industrial activity.
“Both domestic and external demand are weak,” Tommy Xie, an economist at Oversea-Chinese Banking Corp. in Singapore was quoted by the news service as saying.
“Market sentiment is bad and it’s too early to say the Chinese economy is bottoming out.”
In early trade, ASX Futures were pointing down by about 1.3%.
Short-term positions in small, early stage ASX companies,
with high potential and near term price catalysts.
Focusing on resource exploration, early-stage tech, and biotech.
Exceptional opportunities across a broad range of
early-stage growth sectors with strong management.
Seeking 1,000% plus returns across medium to long-term holds.
Longer-term positions in a variety of sectors.
Seeking strong management where traction is established and have entered into a growth phase.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.