London – Oil prices fell Monday, hit by a strengthening dollar as dealers digested global manufacturing data for clues about demand growth, analysts said.
Brent North Sea crude for delivery in December slid 42 cents to stand at $85.44 a barrel in late London deals.
US benchmark West Texas Intermediate (WTI) for December lost 43 cents to $80.11 a barrel compared with Friday’s closing level.
Crude oil futures had risen slightly earlier in the day.
“The focus right now is on the manufacturing data…. We are looking for signs of industrial growth, which will in turn mean greater crude demand,” Daniel Ang, investment analyst at Phillip Futures brokers told AFP.
The US manufacturing sector picked up speed in October after a dull September, with companies reporting rising orders and more job creation, but a significant slowdown in price gains, according to data released Monday.
The Institute for Supply Management’s purchasing managers index (PMI) for last month jumped to 59.0 from 56.6 the previous month, though that put it back at the same level as in August.
A PMI reading above 50 indicates expansion.
Separate data published on Monday showed that activity in the eurozone’s manufacturing sector nudged higher in October as businesses cut prices.
And over the weekend, China’s official PMI came in at 50.8 in October compared with 51.1 in September – raising concerns about slowing growth in the world’s second-largest economy and top energy consumer.
“Market participants will be keeping an eye on the recent macroeconomic indicators which could provide direction in the market,” said Myrto Sokou, senior research analyst at Sucden brokerage firm.
She added: “The strong dollar currently weighs heavily on the oil market.”
A stronger greenback makes dollar-priced oil expensive for buyers using weaker currencies, denting demand.
The dollar has gaining in recent weeks on expectations of US interest rates rising.
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