Oil prices fell on Monday following weak factory data of the largest economies in Asia.
Benchmark Brent crude futures dropped five cents to $37.23 a barrel, while the US West Texas Intermediate (WTI) futures slipped ten cents to $36.94, Reuters reported.
On 3 January 2016, the world’s biggest oil exporter Saudi Arabia cut diplomatic ties with Iran following the storming of its embassy in Tehran.
The diplomatic row between these two countries escalated following the execution of a prominent Shi’ite cleric by Riyadh two days earlier.
Data revealed that factory activity in China dropped for a tenth straight month, prompting a 7% fall in the country’s stock markets, and led to suspension of trading.
A private survey focusing more on small and medium-sized private firms revealed that the Caixin / Markit China Manufacturing Purchasing Managers’ Index fell to 48.2 in December 2015, and was the lowest since September.
India’s manufacturing activity also dropped for the first time in two years.
According to Nikkei research, the seasonally adjusted India Manufacturing Purchasing Managers’ Index, slipped to 49.1 in December 2015.
As the Organization of the Petroleum Exporting Countries (OPEC), Russia and the US are producing high levels of oil between 0.5 million and two million barrels every day, prices of the commodity are still down by two-thirds since mid-2014.
Iran expects to increase oil exports by half a million to one million barrels per day (bpd) following the lifting of sanctions against the country.
During 2011, oil exports in the country fell to around one million bpd.