Oil creeps higher, capped by economic worries

2nd July 2010, Comments 0 comments

Oil prices rose on Friday, but gains were capped by recent weak economic data out of the United States and China, the world's number one and two energy users respectively, analysts said.

New York's main contract, light sweet crude for August delivery, gained a marginal 14 cents to 73.09 dollars.

Brent North Sea crude, also for August delivery, climbed 23 cents to 72.57 dollars.

"The recent bearish economic data out of China and the US have hit crude oil.... The bearish data is overwhelming the oil market," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

Figures released on Thursday showed China's industrial sector slowing with the HSBC China Manufacturing PMI, or purchasing managers index, falling to 50.4 last month from 52.7 in May.

A Chinese government agency said its PMI fell to 52.1 from 53.9 the previous month.

A 50 reading is the break-even point between growth and contraction.

Meanwhile, the US provided a barrage of bad indicators that further rattled sentiment.

The US manufacturing sector, which has been driving the almost year-old fragile economic recovery from recession, grew for the 11th straight month in June but more slowly than expected, an industry survey showed.

The Institute of Supply Management (ISM) said its PMI slipped to 56.2 percent from 59.7 percent in May.

New claims for US unemployment benefits jumped more than expected last week, official data showed on Thursday on the eve of the key June jobs report.

And pending US home sales plunged 30 percent in May after an April 30 tax-credit deadline expired, more than twice as much as analysts expected.


© 2010 AFP

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