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Oil prices bleeding red on weak Chinese PMI

Chinese economic sentiment erases much of a late Monday rally sparked by OPEC.

By Daniel J. Graeber
Oil prices bleeding red on weak Chinese PMI
Weak factory data from China pushes crude oil prices down more than 3 percent in early Tuesday trading. Photo by Stephen Shaver/UPI | License Photo

NEW YORK, Sept. 1 (UPI) -- A reported contraction in Chinese factory activity helped push crude oil prices deep into negative territory in early Tuesday trading.

Crude oil has traded in a volatile market navigating a string of bad news from China and positive news from the United States, the No. 2 and No. 1 global economies, respectively.

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Crude oil prices were hammered in early trading Tuesday in weak Chinese economic data. Brent crude oil prices fell 3.6 percent at the opening of the trading day in New York to $52.18 per barrel. West Texas Intermediate, the U.S. benchmark price, mirrored Brent's decline, falling to $47.39 in the first full trading day of September.

China's manufacturing purchasing managers' index for August was 49.7, indicating a contraction. The National Bureau of Statistics said August data were the lowest in three years and a sign of a continued slowdown in the nation's economy.

"The Chinese economy is spiraling down, with a murky outlook," Qu Hongbin, chief China economist at HSBC, was quoted by official Xinhua News Agency as saying.

Crude oil prices soared in midday trading Monday after the publication of a monthly market bulletin by the Organization of Petroleum Exporting Countries. The 12-member production group said it was interested in equilibrium in a market heavily favoring the supply side, but maintained the need for a level playing field.

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"OPEC will protect its own interests," it said.

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