Brent crude holds above $119 as China offsets Europe, US
Brent crude held steady above $119 a barrel on Tuesday, with an expansion in Chinese manufacturing helping to counter gloomier economic outlooks from the euro zone and the United States that could depress fuel demand.
China's vast factory sector grew at a slightly higher rate in April from the previous month, a sign that its economy may have bottomed out in the first quarter. The world's second-largest oil consumer is expected to account for nearly half of global incremental oil demand this year, according to the International Energy Agency.
"China is still in an expansionary phase and we saw a slight tick-up on the month," said Ben Le Brun, a Sydney-based market analyst at OptionXpress. "That will offset that negativity we saw filtered through from Europe last night."
"We may see a bit of a delayed reaction as prices are not moving much in the Asian session."
Brent crude for June edged 21 cents lower to $119.26 a barrel by 0633 GMT. The front-month contract fell nearly 3 percent in April, its first loss in four months.
U.S. crude for June was down 20 cents at $104.67 a barrel after posting its first fall in seven sessions on Monday.
But debt woes in the euro zone continued to cast a pall over the region's economies, with Spain, the fourth-largest economy in the euro zone, sinking into recession in the first quarter.
Economists said spending cuts aimed at meeting strict EU deficit limits, together with a reeling bank sector, would delay any return to growth until late this year or beyond.
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