23 June 2015 – Oil prices fell in Asian trade on Tuesday on renewed worries over a global glut of oil and lack-lustre demand ahead of preliminary manufacturing figures from China and Japan later on Tuesday.
But a forecast draw-down in US crude stocks put a floor under prices. Brent crude for August delivery was down 16 cents at $63.18 a barrel early on Tuesday, after closing the previous session up 32 cents. US crude for August delivery fell 18 cents to $60.20 a barrel.
The July contract, which expired on Monday, closed up 7 cents at $59.68 a barrel.
“I think the Japan and China PMI figures are weighing on the market,” said Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance. China and Japan are Asia’s two biggest oil importers.
Japan’s PMI June figures are due for release early on Tuesday, just before the HSBC Flash China Manufacturing PMI, while Euro zone PMI figures will follow later in the day.
“Although lately data has been weak, growth in these regions should support crude prices,” Phillip Futures said in a research note.
A figure below 50 in the purchase manufacturers index would show contraction in manufacturing activity, while a figure above 50 would show an expansion of activity.
Growth in US gasoline stocks, which increased by almost 500,000 barrels in the week to June 12, high US crude output of about 9.6 million barrels per day and 2 million bpd of excess capacity by oil producers cartel Opec added to oversupply concerns,
Barratt said. US commercial crude stocks likely fell last week by an average of 1.8 million barrels to around 466 million barrels, according to a Reuters analysts poll on Monday taken ahead of weekly industry and US Department of Energy inventory reports.
Analysts at ANZ have forecast a 1.5 million barrel decline in US crude inventories, a move which may give some support for oil prices this week.
Industry group, the American Petroleum Institute (API) will release its data on Tuesday, while the US Department of Energy’s Energy Information Administration (EIA) will publish its data on Wednesday.