• Sunday, May 26, 2024
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BusinessDay

Oil slips from one-month high above $105, economy drags

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Oil slipped from its highest in nearly a month above $105 a barrel on Monday as fresh signs of economic weakness countered perception of an increased threat to Middle East supply after Israeli air strikes on Syria, Reuters showed.

European purchasing managers’ indexes (PMIs) on Monday suggested the euro zone is on course for a worse downturn in the current quarter. In China, the second-largest oil consumer, a survey covering services showed April’s growth was the weakest since August 2011.

Crude had risen earlier in Monday’s session as Israeli air strikes around Damascus refocused attention on supply risks from the Middle East, source of about a third of the world’s oil. Brent crude was down 20 cents at $103.99 by 1315 GMT, having earlier touched $105.49, the highest since April 11. U.S. oil was down 59 cents at $95.02, having earlier reached $97.17.

Morgan Stanley cited signs of a stronger physical market for Brent, such as a drop in expected Nigerian crude exports and supply of North Sea crude Ekofisk in June.

“Crude oil fundamentals continue to tighten, with supply disappointing yet again,” the bank said in a report on Monday. “The key risk remains weak demand.”