Crude oil futures fall to session low following dismal German PMI

                    Crude oil futures fell to the lowest level of the session during European morning hours on Tuesday, as investors sold growth-linked assets following the release of disappointing manufacturing data out of Germany.

Germany is a major oil consumer and manufacturing numbers are often used as indicators for future fuel demand growth.

On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD88.14 a barrel during European morning trade, down 1.2% on the day. 

New York-traded oil fell by as much as 1.3% earlier in the session to hit a daily low of USD88.08 a barrel.

Market research group Markit said that its preliminary euro zone manufacturing purchasing managers’ index fell to a four-month low of 46.5 in April from a final reading of 46.8 in March. 

Meanwhile, Germany’s manufacturing purchasing managers’ index fell to a four-month low of 47.9 in April from a final reading of 49.0 in March. 

The report also showed that service sector activity in Germany expanded at the slowest rate in six months in April, with the services PMI falling to 49.2 from 50.9 in March.

The data came after a report showing that manufacturing activity in China expanded at a slower rate in April, underlining concerns over a slowdown in demand from the world’s second largest oil consumer.

China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to a two-month low of 50.5 in April from a final reading of 51.6 in March.

Market players now looked ahead to the release of fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer. 

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 1.6 million barrels. 

The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand. 

Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery declined 0.95% to trade at USD99.44 a barrel, with the spread between the Brent and crude contracts standing at USD11.30 a barrel.

London-traded Brent prices fell to a nine-month low of USD96.76 a barrel on April 18.

The European benchmark has been under heavy selling pressure in recent sessions, amid growing concerns over the euro zone’s economic outlook. 
Courtesy : Investing.com