Brent falls by 2.5 percent
Oil prices bounced back more than a dollar on Monday, after hitting 5-1/2-year lows of $60.28 earlier in the session, as traders began pricing in expectations of improving manufacturing data to be published later this week.
Brent fell as much as 2.5 percent after the International Energy Agency forecast price falls and OPEC’s chief defended the group’s decision not to cut its output target. Oil producers group OPEC can ride out a slump in oil prices and keep output unchanged, its head Abdullah al-Badri said on Sunday, arguing market weakness did not reflect supply and demand fundamentals and could have been driven by speculators, pulling down prices in early Asian trading. But the market recovered to $62.95 a barrel as traders said the market was pricing in expectations of improving global manufacturing data to be published this week.
“With preliminary manufacturing PMI scheduled to release this week, it may give some support to falling oil prices,” said Singapore-based Phillip Futures on Monday. “Expectations for this month’s PMI are favourable which should prevent a further drop for the week. Provided manufacturing PMI figures are favourable, we expect to see a slight recovery to $61.81 for WTI Feb ’15 and $63.26 for Brent Feb ’15 for this week,” it added.