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February 1, 2015

Oil falls on weak Chinese manufacturing activity and US refinery strikes

The price of Brent crude oil dropped on Monday due to weak manufacturing activity in China and a refinery strike by the US unions.

The price of Brent crude oil dropped on Monday due to weak manufacturing activity in China and a refinery strike by the US unions.

Reuters reported that Brent crude oil futures fell $1.06 to $51.93 a barrel, while US WTI futures dropped $1.01 to $47.24 a barrel.

A private business survey has revealed that China had a reduced factory activity for the second straight month in January.

"Oil production in the shale basins will inevitably decrease as weaker, higher-cost producers shutter their operations."

The prices also dropped due to a sharp decline in US drilling and a strike at nine refineries and chemical facilities across the country.

Nomura was quoted by Reuters as saying: "Oil production in the shale basins will inevitably decrease as weaker, higher-cost producers shutter their operations. This supports our view that oil prices will recover this year and average $60 per barrel for Brent."

Analysts said the prices dropped due to profit-taking following gains in the last week and increasing production by OPEC, which balanced the reduced US drilling.

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The news agency reported that international Brent benchmarks rose back above $50 per barrel for the first time since early January.

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