Thursday, June 27

Oil below $88 as China manufacturing stays weak


BANGKOK: Oil fell below $88 a barrel Wednesday in Asia as China’s manufacturing stayed weak and hopes dimmed the Federal Reserve will announce a further loosening of monetary policy to boost the flagging US economy, AP reports.

Benchmark crude for September delivery was down 15 cents at $87.91 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract lost $1.72 to settle at $88.06 in New York on Tuesday.

Brent crude was down 38 cents at $104.54 on the ICE futures exchange in London.

Data from China, the world’s No. 2 crude consumer, showed that manufacturing slowed in July as government efforts to boost the economy couldn’t completely offset weak overseas demand for exports.

The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers’ index, or PMI, fell 0.1 percentage point to 50.1 in July, the slowest growth in eight months and just above the 50 level signifying expansion. A separate survey by HSBC showed manufacturing contracting, albeit at a slower rate than in previous months.

Expectations faded that the Fed will announce new measures to boost the US economy after a two-day policy meeting that ends Wednesday.

Traders have been guessing for months about when and whether the Federal Reserve would try to spark the economy. Hopes rose last week, then retreated Tuesday, following reports of strengthening consumer confidence and home values.

In other energy futures trading, heating oil shed 0.4 cent to $2.844 a gallon and gasoline was almost unchanged at $2.774 a gallon. Natural gas rose 1.3 cents to $3.222 per 1,000 cubic feet.