Oil Trades Lower after China PMI Data

Oil futures are trading to the downside to start the week in Asia after China delivered a March PMI that missed estimates.

On the New York Mercantile Exchange, light, sweet crude futures for May delivery fell 0.18% to USD97.06 per barrel in Asian trading Monday after China reported March PMI of 50.9, slightly below analysts' estimates calling for 51.2. Readings above 50 indicate expansion.

Still, the March reading is up 50.1 in February. China's PMI reading has never declined from February to March, but the average increase prior to today had been 3.1 points, according to a research note released by Bank of America earlier today.

China's official PMI data comes courtesy of the country's National Bureau of Statistics, which surveys 3,000 companies across 21 industries. That compares with the flash reading provided by HSBC, which surveys just 430 Chinese firms.

For oil traders, the China PMI may be viewed as a split decision of sorts. The reading above 50 is encouraging, it is above February's reading and an 11-month high, but the March figure did miss estimates.

"The improvement in the index, which changes the downward trend of the first two months of the year, indicates that the economic outlook in general is stabilizing," Zhang Liqun, an analyst at the Development Research Center, said in a statement. China is the world's second-largest oil consumer behind the U.S.

Oil also slipped on news Bank of Cyprus depositors will have 37.5% of their deposits above EUR100,000 turned into voting shares in the bank, which would also entitle the depositors to future dividends. Another 22.5% of the deposits will be withheld to ensure the bank is properly capitalized.

Elsewhere, Brent crude for May delivery rose 0.04% to USD109.88 per barrel on the ICE Futures Exchange.