SINGAPORE: Brent crude dipped towards $66 a barrel on Monday as weak Chinese data added to demand fears, while near-record supplies from OPEC producers maintained worries about oversupply.
China, the world’s second-largest oil consumer, posted its biggest drop in factory activity in a year to 48.9 in April, a private business survey showed on Monday. The sub-50 point level indicates a contraction compared with the previous month.
The data came on the heels of a top government think tank’s forecast that China’s economic growth could slow further to 6.8 percent in the second quarter.
“The Chinese data is weaker but it seems the oil market has had a limited reaction. What the market really wants to see is supply being cut to match the demand level,” said Ric Spooner, chief market analyst at Sydney’s CMC Markets.
Oil supplies from the Organization of the Petroleum Exporting Countries, which produces about 40 percent of oil supplies, climbed 0.2 percent to a more than two-year high in April, a Reuters survey showed.
Brent June crude futures (LCOc1) dropped 11 cents to $66.35 a barrel by 0412 GMT, after hitting a 2015 peak of $66.93 on April 30.
U.S. June crude (CLc1) declined 7 cents to $59.08 a barrel. WTI hit its highest this year at $59.90 on May 1.
