01 April 2014, News Wires – Brent crude held above $107 a barrel on Tuesday, unmoved by manufacturing data from China that was in line with forecasts as traders await US jobs figures later this week to assess global economic health and fuel demand.
Activity in China’s factory sector edged up slightly in March, a government survey showed, though the figure is unlikely to dispel concerns that the world’s second-largest economy slowed more than expected in the first quarter.
May Brent crude was at $107.67 a barrel, down 9 cents early on Tuesday. US crude for May delivery edged down 23 cents to $101.35 a barrel.
“People are reluctant to take any fresh macro interpretation until we see what the U.S. unemployment data holds for us,” Mark Keenan, head of commodities research in Asia at Societe Generale, said, referring to the non-farm payrolls data due on Friday.
“That’s going to be the major determinant for prices in the macro perspective. Until then I think we’re just going to be driven by fundamental data with respect to inventory.”
US commercial crude stocks likely continued to build last week on higher imports despite an expected upswing in refinery runs, while inventories of refined oil products were projected to have fallen, a preliminary Reuters poll of four analysts showed.
Crude stocks are expected to rise 2.5 million barrels on average for the week ending 28 March according to the poll.
“We’re entering into a seasonally weak period for the oil complex. Refinery runs will start to slow down and that will weigh on prices,” Keenan said.
Oil may face further downward pressure if Libya manages to resume more production. Rebels in eastern Libya are close to reopening three oil ports they have occupied since the summer to press Tripoli for autonomy and a greater share of oil revenue, a leader from the rebels’ tribe told state media on Monday.
Investors continued to keep tabs on the Ukraine crisis which has raised jitters in global financial markets.
In a gesture that could ease tension in the worst East-West stand-off since the Cold War, Russia pulled some troops back from near Ukraine’s eastern frontier – a move the US said would be a positive sign if it is confirmed as a withdrawal.
“The relationship between oil prices and the Russian situation has always been a little tenuous,” Keenan said. “The commodities more specifically sensitive are natural gas, grain markets and maybe gold as a safe haven.”