A downturn in factory activity in the world’s second-biggest oil consumer was expected – the fourth straight month of contraction – but analysts also saw initial signs of stability.
Losses were kept in check thanks to the Ukraine, where acting president Oleksander Turchinov called for government forces to relaunch an offensive against pro-Russian rebels.
Brent crude fell $0.07 to $109.20 by Wednesday morning, after ending $0.68 lower in its biggest drop in two weeks.
US oil fell $0.22 to $101.54, after losing more than 2% in its steepest decline in nearly four months.
“China is slowing down and that’s a concern, but people don’t expect it to fall off a cliff,” Mitsubishi oil risk manager Tony Nunan told Reuters.
“Geopolitical concerns over Ukraine, unfinished issues such as Syria and Libya, are keeping prices supported.”
Going by fundamentals and without the current risk premium on oil, Brent should be closer to $100 per barrel with the US benchmark around $90, Nunan reportedly said.
“People expect nothing is going to happen over Ukraine, but there is that ‘but’,” Nunan said.
Oil is also drawing support from a slower rate of increase than expected in US stockpiles last week.
Crude inventories rose by 519,000 barrels in the week ended 18 April, data from industry group the American Petroleum Institute showed, compared with analysts’ expectations of an increase of 2.3 million barrels.
Gasoline stocks fell by 3.4 million barrels, a massive jump from the 1.7-million-barrel decline forecast.
Investors are now awaiting data from the Energy Information Administration (EIA) to get a clearer picture on the country’s demand outlook, expected for later in the day.
US crude oil stocks have surged 43 million barrels since mid-January and jumped 10 million barrels in the week to 11 April, well beyond expectations.
Stocks on the Gulf Coast hit a record high due to a rise in imports, as domestic output hit its highest in 26 years, EIA’s previous data showed.
“On the supply side, the big story continues to be US tight oil,” Nunan said. “Gasoline demand is rising, so that’s balancing things out a bit. But, overall oil markets are oversupplied.”
Investors are also keeping an eye on Libya’s progress in ramping up exports.
The North African nation’s oil production is currently around 220,000 barrels per day as several western oilfields remain closed due to protests, a spokesman for state-run National Oil Corporation said.
The El Sharara, El Feel fields and oil condensates production at the Wafa field were still shut down last week.
Libya’s oil production was 1.4 million bpd until July when a wave of protests at oilfields and ports started across the North African country.
A downturn in factory activity in the world’s second-biggest oil consumer was expected – the fourth straight month of contraction – but analysts also saw initial signs of stability.
Losses were kept in check thanks to the Ukraine, where acting president Oleksander Turchinov called for government forces to relaunch an offensive against pro-Russian rebels.
Brent crude fell $0.07 to $109.20 by Wednesday morning, after ending $0.68 lower in its biggest drop in two weeks.
US oil fell $0.22 to $101.54, after losing more than 2% in its steepest decline in nearly four months.
“China is slowing down and that’s a concern, but people don’t expect it to fall off a cliff,” Mitsubishi oil risk manager Tony Nunan told Reuters.
“Geopolitical concerns over Ukraine, unfinished issues such as Syria and Libya, are keeping prices supported.”
Going by fundamentals and without the current risk premium on oil, Brent should be closer to $100 per barrel with the US benchmark around $90, Nunan reportedly said.
“People expect nothing is going to happen over Ukraine, but there is that ‘but’,” Nunan said.
Oil is also drawing support from a slower rate of increase than expected in US stockpiles last week.
Crude inventories rose by 519,000 barrels in the week ended 18 April, data from industry group the American Petroleum Institute showed, compared with analysts’ expectations of an increase of 2.3 million barrels.
Gasoline stocks fell by 3.4 million barrels, a massive jump from the 1.7-million-barrel decline forecast.
Investors are now awaiting data from the Energy Information Administration (EIA) to get a clearer picture on the country’s demand outlook, expected for later in the day.
US crude oil stocks have surged 43 million barrels since mid-January and jumped 10 million barrels in the week to 11 April, well beyond expectations.
Stocks on the Gulf Coast hit a record high due to a rise in imports, as domestic output hit its highest in 26 years, EIA’s previous data showed.
“On the supply side, the big story continues to be US tight oil,” Nunan said. “Gasoline demand is rising, so that’s balancing things out a bit. But, overall oil markets are oversupplied.”
Investors are also keeping an eye on Libya’s progress in ramping up exports.
The North African nation’s oil production is currently around 220,000 barrels per day as several western oilfields remain closed due to protests, a spokesman for state-run National Oil Corporation said.
The El Sharara, El Feel fields and oil condensates production at the Wafa field were still shut down last week.
Libya’s oil production was 1.4 million bpd until July when a wave of protests at oilfields and ports started across the North African country.