Brent crude oil plunged more than $1 per barrel on Monday as data showed manufacturing contracted and Libya’s oil production was rebounding.
Gasoline prices in the US tumbled to their lowest since April 3. Investors sold off long positions before a change of gasoline quality for the summer driving season. The seasonal tendency exerted downward pressure on the entire global oil gauge, analysts said.
“The bottom is falling out of RBOB. You have serious long liquidation. There is no way Brent or WTI can have an up day when the gasoline market is in a nosedive,” analyst Walter Zimmerman of New Jersey-based United-ICAP is quoted by Reuters as saying.
The per-barrel price of Brent crude for June settlement fell $1.25 to trade at $107.34 as of 1750 EDT. US crude plummeted 63 cents at $99.13. The volume of all the futures exchanged was 26% lower than the average for the last 100 days, reported Bloomberg.
US gasoline declined 5 cents to $2.8945 per gallon. The future surged to a high of $3.1128 on April 24, and has dropped firmly since.
Sufficient supply is also exerting pressure on the contract. Last week, a report from the US Energy Information Administration indicated an unexpected surge in gasoline inventories.
An indication by the HSBC/Markit purchasing managers’ index for China contributed to concerns that the country’s economy is still losing pace of growth.
The factory output measure was lower than expected, reading 50.4 from 50.3 in March. China overtook the US in September to become the biggest importer of crude oil, data from the US Energy Information Administration showed.
US crude inventories jumped to 399.4 million barrels in the week by the week April 25, the EIA said in April 30.
In Libya, engineers at El Sharara oilfield were optimistic about resumption of production after tribesmen brought a blockade to a halt.
To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com