The Western Texas Intermediate (WTI) – for delivery in July – eased seven cents to $104 in afternoon trade, after jumping $1.74 which was close to a one-month high yesterday.
Brent North Sea crude oil for July was down three cents at $110.51. The contract gained 86 cents in London, touching a level last seen in early March.
Banking giant HSBC said preliminary data from its Purchasing Managers Index (PMI) showed activity in China’s factories shrinking at a much slower pace in May than the previous month, improving from 49.7 to 48.1.
Whilst this figure is below the 50-mark, which normally signals a contraction, it is the second straight month of improvement and is a telling sign that the world’s number two economy is picking up.
“Chinese PMI came in a lot better than expected, especially since the past few Chinese data [releases] have been really week,” says Desmond Chua, market analyst at CMC Markets in Singapore.