China's Factory Slowdown Raises Questions for Global Oil Market

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Manufacturing,PMI,Oil Price

China's factory activity showed signs of slowing down, but strong exports and global oil demand may offset this.

Factory activity in China slowed down further last month, with the country’s statistics bureau reporting a PMI reading of 49.5—the lowest in five months, Reuters noted in a report. However, a private PMI reading, calculated by S&P Global, showed an uptick in manufacturing activity among smaller companies, Reuters reported separately, with the increase attributed to strong overseas orders.

Energy Information Administration report that revealed oil production and demand in April had jumped to a four-month high, with demand specifically rising to 20 million barrels daily. The slowdown in Chinese factory activity may dampen some of that enthusiasm but the effect may not be lasting in light of such demand figures.

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