Oil dips in cau­tious trad­ing ahead of OPEC meet­ing

Pakistan Observer - - ECONOMY WATCH -

SIN­GA­PORE— Oil prices dipped in Asia Wed­nes­day de­spite of­fi­cial China data show­ing fac­tory ac­tiv­ity ex­panded in May, as traders treaded cau­tiously be­fore an OPEC meet­ing in Vi­enna this week. Crude prices have re­bounded from their Jan­uary lows of un­der $ 30 and last week briefly pushed past $ 50 a bar­rel for the first time this year as the mar­ket gained sup­port from pro­duc­tion out­ages in Canada and Nige­ria. But prices have since re­treated back be­low the key psy­cho­log­i­cal level, and crude fu­tures re­main less than half of their 2014 peaks of over $ 100 amid a stub­born global sup­ply glut.

Of­fi­cial data from China Wed­nes­day show­ing fac­tory ac­tiv­ity ex­panded for the third straight month in May— a fur­ther sign of sta­bil­i­sa­tion in the world’s sec­ond largest econ­omy— has so far not pro­vided a sig­nif­i­cant boost, an an­a­lyst said. The Pur­chas­ing Man­agers’ In­dex ( PMI), which tracks ac­tiv­i­ties in the coun­try’s fac­to­ries and work­shops, showed a read­ing of 50.1. Any read­ing above 50 sig­nals ex­pand­ing ac­tiv­ity. “The up­shot is that while pol­icy eas­ing has clearly helped to sta­bilise growth in China this year, a sig­nif­i­cant re­bound is prov­ing elu­sive,” econ­o­mist Ju­lian Evans- Pritchard of Cap­i­tal Eco­nomics wrote in a note.— AFP

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