Oil dips amid US holiday, China data

AFP

London (AFP) - Global oil prices slid on Monday in subdued deals before a public holiday in the United States and as dealers digested weak Chinese manufacturing data, analysts said.

Losses were however capped by lingering unease over Russia-Ukraine tensions, analysts said.

Brent North Sea crude for October dipped 15 cents to $103.04 per barrel in early afternoon London deals.

US benchmark West Texas Intermediate for October delivery shed 31 cents to $95.65 a barrel.

Floor trading in the United States is closed on Monday for the Labor Day holiday, and electronic transactions will be used to determine the settlement price.

"We are seeing thin trading volumes in Asian trading today ahead of the US Labor Day holiday," Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

"Oil prices are expected to trade within a lower range as dealers consolidate their positions with no new leads expected today," he said.

Investors are also scrutinising data released on Monday showing Chinese manufacturing growth slowed in August, raising concerns about demand in the world's top energy consumer, Chua said.

The National Bureau of Statistics said the official purchasing managers index came in at 51.1, down from 51.7 in July, and the first decline since slipping to 50.2 in February.

The index tracks manufacturing activity in China's factories and workshops and is a closely watched indicator of the health of the economy. A reading above 50 indicates growth, while anything below points to contraction.

The Ukraine crisis is continuing to provide some support to oil prices, with little sign of an imminent solution.

Russian President Vladimir Putin on Sunday raised the stakes in the standoff by calling for the first time for statehood to be discussed for the eastern regions of Ukraine now controlled by pro-Kremlin rebels.

The West is threatening fresh sanctions against Russia, the world's number-two oil producer, for directly aiding the insurgency.

Putin has repeatedly denied Russia is fuelling the conflict or putting any troops on the ground in the former Soviet state, a key conduit for Moscow's gas exports to Europe.