Oil prices recovered from early losses this morning as a more stable euro supported prices. However, there is a worry that China’s demand growth could dent future prices, as its manufacturing activity made a retreat from two-year highs.
Brent gained by 42 cents to reach $114.52 a barrel, while rose US crude rose by 30 cents to reach $93.43, reported Reuters.
In February, the HSBC flash purchasing managers’ index (PMI) plunged to 50.4, down from the previous month’s best level since January 2011, based on Asian shares and base metals.
According to analysts, Brent is expected to trade within a tight range of $113 and $115 a barrel during the next 24 hours, as analysts await the results of the Italian election, which ended today.
Concerns have emerged that results may fail to elect a government that is strong enough to save the country from its economic crisis.
In the US, investors are anticipated to receive evidence from Federal Reserve Chairman Ben Bernanke on Tuesday for further indications of when the Fed may slow, or stop, buying bonds.
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On the other hand, markets are concerned about the results of budget cuts in the US, as the White House and the Republicans have not agreed a deal so far.
The White House has, however, released more warnings about the potential damage the cuts can do to Americans, with just five days remaining before $85bn will be reduced from the US Government budgets.
Prices are also in a constricted range as negotiations between Iran and Western powers are set to commence on Tuesday, to resolve the ongoing crisis over Tehran’s controversial nuclear policy.
Brent remained above $100 a barrel through most of 2012 and in 2013, mainly due to the concerns over a growth in tension and disruption of supplies.
Image: The HSBC flash purchasing managers’ index (PMI) dropped to 50.4 in February. Photo courtesy of freedigitalphotos.net / Michelle Meiklejohn.