Oil market disappointed by latest economic data from the US and China

Brent futures felt some downward pressure as manufacturing activity in the world's top oil consumers, China and the US, slowed in June.

PHOTO: Flags of China and the US. Getty Images

Manufacturing Purchasing Managers' Index (PMI) reading in the US dipped to 48.5% in June, from 48.7% in May, indicating a decline in the country’s manufacturing sector, the US Institute for Supply Management (ISM) reported.

China's manufacturing PMI remained at 49.5% in June, unchanged from the previous month, data from China’s National Bureau of Statistics (NBS) showed. The latest reading shows that the factory activity in China has shrunk for a second consecutive month, market intelligence provider JLC said.

“Sentiment on the China oil demand front remains subdued,” VANDA Insights’ founder and analyst Vandana Hari said.

A PMI reading below 50 typically indicates weak economic health and a contraction in the manufacturing sector, which includes production, inventory levels, new orders, etc. It also highlights demand growth concerns, ultimately weighing down on prices of commodities like oil.

By Aparupa Mazumder 

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