Although Monday’s session in the U.S. witnessed a slump in the futures of oil, they moved up moderately in the initial part of Tuesday in Asia with traders shifting their focus on bargain hunting. The light crude oil futures scheduled for April delivery increased 0.17% to a value of USD90.28 a barrel, following a loss 1.09% to stay at a value of USD89.69 per barrel during U.S. session on Monday, as per reports related to the New York Mercantile Exchange.
On Friday, China reported that the purchasing managers’ index related to February, had witnessed a decline to a value of 50.1 from a position of 50.4 observed in January, resisting the anticipation from economists for a reading of 50.5. This concerning economic details from China, reputed as the second biggest consumer of oil, is seen as the chief reason behind the recent concerns regarding oil. Leaving behind U.S. as the primary importer of oil worldwide, China gained in position. While discussing reasons for this move, the main motive seems to be the increased production, while higher demand in China is also a close competitor.
In the U.S., the elevated outputs from the different shale formations have presently maintained the position of the U.S. at a high, observed over several decades, with the country also exporting this coveted commodity, oil, to meet demands in Latin America and Africa. Focusing back on China, the GDP growth predicted for 2013 read a value of 7.5%, with 3.5% allotted for inflation. These values encouraged investors to move ahead with plans for establishing long positions in the futures related to oil. The non-manufacturing PMI value in China was observed to have moved low to a value of 54.5 in February from the position of 56.2, which was recorded in January.
Nigeria, one of the prominent oil producers in Africa and a member of the Organization of Petroleum Exporting Countries was in the news recently, with Royal Dutch Shell a reputed oil company in Europe stating that it might shut the Nembe Creek oil pipeline in Nigeria. As one of the biggest producers of oil in the country, Shell has been in business there for over 5 decades.