Oil prices fell today as China’s purchasing managers’ index (PMI) for the manufacturing sector dropped to an eight-month low in March, weighing on crude prices over demand concerns.
Brent crude dropped by $0.27 to $106.65 a barrel, while US oil was down by $0.18 to $99.28, reported Reuters.
China’s flash Markit/HSBC Purchasing Managers’ Index (PMI) fell to an eight-month low of 48.1 in March from February’s final reading of 48.5, indicating a shrinking of the world’s second largest economy.
The preliminary March index revealed that new orders fell to 46.9, while output slumped to 47.3, the lowest since September 2012.
Oil prices also fell due to a seasonal slump in demand, which has led to a near 5% price drop since the beginning of March, where Brent climbed to a three-month high above $112 due to geopolitical tensions between Russia and Ukraine.
Ongoing unrest in Libya and other oil exporting countries is weighing on oil prices, though the market is emerging from a severe winter season in the northern hemisphere.
The Libyan state-run National Oil Corp said that rebels have occupied ports and oilfields, while a pipeline problem reduced production at the south-western el-Feel oilfield from 80,000bpd to 60,000bpd.
Geopolitical tensions between Russia and Ukraine also supported crude prices as NATO‘s top military commander said that Russia had built up a "very sizeable" force on its border with Ukraine, while Moscow has its sights on another ex-Soviet republic, Moldova.
Russian troops seized some of the last military facilities under Ukrainian control in Crimea using armoured vehicles, automatic weapons and stun grenades.
Image: China’s PMI drops to an eight-month low in March. Photo: courtesy of FrameAngel.