Oil prices fall in Asia on Chinese data

SINGAPORE (AFP) – Oil prices fell in Asia Tuesday, surrendering some of their big gains of a day earlier after data showed manufacturing activity in top energy consumer China contracted in August.

The contraction in the Purchasing Managers' Index (PMI) for China's factory sector fuelled concerns about the health of the world's second biggest economy.

US benchmark West Texas Intermediate (WTI) for October fell $1.40 to $47.80 and Brent crude for October dropped $1.39 to $52.76 barrel in afternoon Asian trade.

WTI had surged 8.8 percent and Brent advanced 8.2 percent on Monday as the US government lowered its domestic production estimate and the OPEC cartel said it was ''ready to talk'' to producers about prices, which had fallen last month to their lowest levels in six and a half years.

The PMI for China's key manufacturing sector slumped to a three-year low of 49.7 in August, an official index showed, the latest sign of slowing growth in the country which is a major engine for global economic growth.

The reading was worse than the 50.0 reading in July and the first time it had showed a contraction since February. A figure above 50 signals expansion in the sector, while anything below indicates shrinkage.

US financial giant Citigroup said in a market commentary that China was driving prices of commodities, including oil, ''as never before, and it is driving them lower'', correct.''