Brent crude oil futures slipped towards $108 a barrel today due to weak demand in Europe, but recent Chinese manufacturing data helped the market lift the fuel demand outlook.
Brent futures for July were down 30 cents at $108.53 a barrel, while US crude was down eight cents at $102.39 a barrel, Reuters reported.
The news agency reported that the futures market is starting to reflect weakness in the physical market, where price levels dropped to a two-year low last week.
According to Reuters, the supply of the four crudes that underpin the Brent futures contract is seen as ample, with very little currently moving outside north-west Europe.
Research consultancy Energy Aspects predicts that Brent could fall towards $107 a barrel once refiners in north-west Europe cut runs.
Energy Aspects said Mediterranean refiners have already started on voluntary run cuts.
The factory and services sector in China helped keep a floor under oil prices with some reasonable numbers in their best showings in months.
A survey by Reuters has revealed that the Organization of the Petroleum Exporting Countries’ (OPEC) oil output surged to a three-month high in May 2014, due to increased supplies from Angola and a further gain in exports from southern Iraq.
The final HSBC/Markit purchasing managers’ index (PMI) increased to 49.4 in May 2014, which is a four-month high.
