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Oil prices continue downward trend on fear of demand decline (Brent: $46.3)

Oil prices have halved since last year and are now at the lowest level in more than 6 years.

Fear of slowing growth in China increases. The latest manufacturing activity data from China declined to the lowest level since 2009, 47.1 (48.2 expected). A figure below 50 indicates decline, the figure has been below 50 since March.

Weighing on prices is the continued ample supply situation with crude oil builds in the U.S. and OPEC pumping at record levels. Saudi Arabia increased oil exports to 7.365 mio. bpd in June (6.935 mio. in May). Also Libya reports of (hopes of) increase. At present, markets seem to ignore the fact that U.S. crude production has dropped by 250,000 bpd since the beginning of June and the continued high stockpiles are partly due to increased imports from Canada and refinery maintenance.

Turning to economic data, the U.S. Philadelphia Fed Manufacturing Index came out better than expected yesterday as did the number of homes sold. This morning, a row of European manufacturing PMIs will be published.