Oil prices decreased today after China released fresh data, which painted a gloomy picture of the country’s strength of recovery, while a firm dollar also added additional pressure on commodity markets, including oil.
Brent crude dropped by 40 cents to $102.20 per barrel, while US crude also slipped by 40 cents to $93.88, reported Reuters.
In China, flash HSBC Purchasing Managers’ Index (PMI) for May declined to 49.6, while a sub-index measuring total new orders also contracted to an eight-month low.
The US Energy Information Agency (EIA) released data, which showed that gasoline stockpiles in the country increased to more than 220 million barrels, which is nearly ten percent higher than in 2012.
Oil prices also came under pressure as the dollar rose to a three-year high, following comments by Federal Reserve chairman Ben Bernanke after the Fed’s May meeting.
Bernanke’s comments led to the speculation that the Fed may begin to scale back asset purchases in 2013.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The chairman, in a testimony to Congress, said the Fed could "in the next few meetings take a step down" in its purchases.
On the other hand, several commodities, including oil, got a boost after the US central bank’s three quantitative easing programmes released hundreds of billions of dollars into money markets during the last four years.
Investors will now keep a close watch on the eurozone’s PMI, which is slated to be released on Thursday, to get better understanding of the health of the troubled region’s economies.
Image: Oil prices were also pulled down as the dollar rose to a three-year high. Photo courtesy of freedigitalphotos / David Castillo Dominici.