Singapore | Crude prices were unstable in Asia today after weak Chinese manufacturing data pared gains from Beijing’s stimulus measures and a fresh hint that oil producers could cooperate to stabilise the market. Prices had risen yesterday as oil kingpin Saudi Arabia suggested it was open to a coordinated solution to market volatility while insisting it would not cut production. Sentiment was also boosted by China’s decision to slash reserve requirements for banks, freeing up additional funds for lending. China’s Purchasing Managers’ Index (PMI) data issued Tuesday showed manufacturing activity shrank at its fastest rate in four years in February, a fresh sign of sustained weakness in the world’s second-largest economy.
At around 0445 GMT, the US benchmark West Texas Intermediate (WTI) for April delivery was two cents higher at USD 33.77 a barrel on the New York Mercantile Exchange. In London, Brent North Sea crude for May was down three cents to USD 36.54 a barrel. Both had fallen in earlier Asian trade. Phillip Futures investment analyst Daniel Ang told AFP in Singapore that you need to see stronger manufacturing PMI, stronger economic growth before you can be certain oil demand in China will increase. Ang noted that while the Saudi comments could provide support for the market, it was only a short-term one. It goes back to the basics of supply and demand. Saudi Arabia does hold a very big weight but the truth is I don’t really see a lot of concrete action coming from them, he said.
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