Crude prices recover in Asia

2012-07-03 08:32

Singapore - Crude prices rebounded in Asian trade on Tuesday on bargain hunting, erasing earlier declines triggered by weak factory data in the world's major economies, analysts said.

New York's main contract, light sweet crude for August delivery, advanced 82 cents to $84.57 a barrel and Brent North Sea crude for delivery in August was 96c higher at $98.30.

Crude had slipped in early trading as investors took stock of weak manufacturing figures from key global economies that were seen as affecting energy demand, IG Markets said in a report.

"Faltering manufacturing output across the world's biggest economies spooked some investors," it said. "The US, China, Japan and Europe are all seeing their lowest levels for up to three years."

Data from the US Institute for Supply Management released late Monday showed its June manufacturing index falling to 49.7%, from May's 53.5%

It was first time the index had fallen below the 50% break-even point between contraction and growth since July 2009, and was a grim reminder of the economic problems in the world's largest oil consumer.

In China, figures from British bank HSBC showed manufacturing activity in the world's largest energy consumer contracting for the eighth consecutive month in June, despite an interest rate cut.

The bank's purchasing managers' index (PMI) for China, which gauges the manufacturing sector, fell to 48.2 in June from 48.4 in May.

Japanese manufacturing activity also shrank in June for the first time in seven months, data from London-based research firm Markit showed Friday, while their eurozone numbers showed output unchanged from a month ago and at its lowest level since June 2009.