oil

Oil prices declined today after China released weak manufacturing data, further worrying investors who were already concerned after the US Federal Reserve announced it will roll back its stimulus by the end of 2013.

Brent crude slipped $1.57 to $104.58 a barrel, while US oil fell $1.70 to $96.50, reported Reuters.

China’s manufacturing data showed that its economy expanded at its slowest pace for 13 years in 2012.

Investors are worried that the disappointing data so far is an indication the country could miss its growth target of 7.5% for the year.

On Wednesday, Fed Chairman Ben Bernanke, after a policy meeting, announced that the central bank may reduce its bond-buying programme in mid-2014. Bernanke’s statement added more pressure to assets priced in the dollar.

Oil prices also came under pressure due to the surprise increase in crude inventories in the US, despite the ongoing summer driving season.

Crude stockpiles jumped by more than 300,000 barrels in the week to 14 June, against a Reuters survey that predicted a drop of 500,000 barrel.

Prices, however, are likely to drop further from the current levels, mainly due to worries about a disruption in supplies from the Middle East.

Investors are concerned that the ongoing violence in Syria will escalate, following the US Government’s decision to send weapons to Syrian rebels after it was found that the country’s government had used chemical weapons against opposition forces.


Image: Oil prices came under pressure after China’s manufacturing data revealed that its economy expanded at its slowest pace for 13 years. Photo courtesy of freedigitalphotos.

Energy