Oil futures lost ground Monday as investors focused on signs of slowing economic activity in China.
China’s manufacturing activity dropped to a six-month low in April as lockdowns continued in Shanghai and other manufacturing hubs amid an attempt to stem COVID-19 outbreaks, according to a survey released Saturday. The monthly purchasing managers’ index, released by China’s National Bureau of Statistics, fell to 47.4 in April, down from 49.5 in March on a 100-point scale. Numbers below 50 show activity contracting.
Crude had briefly bounced in earlier activity, with underlying support tied to developments last week that saw the European Union moving toward a ban on imports of Russian crude after Germany appeared to drop its opposition to such a move. German Economy and Climate Minister Robert Habeck said Sunday that Europe’s largest economy has reduced the share of Russian energy imports to 12% for oil, 8% for coal and 35% for natural gas.
The fluctuation in crude prices “is a speeded-up version of what has been happening over the past few weeks, which have seen days of gains and losses alternating almost like clockwork,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.