Oil slips in Asian trade

Agence France-Presse

Posted at Oct 04 2010 12:47 PM | Updated as of Oct 04 2010 08:47 PM

SINGAPORE - Crude prices inched down in Asian trade on Monday but analysts said markets would continue rallying as investment appetite returned with a buoyant Chinese manufacturing sector and weakening greenback.

New York's main contract, light sweet crude for November delivery, slipped six cents to $81.52 a barrel.

Brent North Sea crude for delivery in November, eased a cent to $83.74.

Oil prices were taking a break from gains made last week but would continue climbing in the near term, said Serene Lim, oil and gas analyst for ANZ bank in Singapore.

"I think probably markets are taking a breather because last week we actually saw oil prices rallying," she said.

Crude markets had risen from Thursday, with prices shooting to $81.66 in Friday intraday trade, the highest level since August 9.

Strong Chinese manufacturing data and fears of a weakening dollar due to a possible US Federal Reserve intervention will push crude markets up in the near term, Lim said.

"Oil prices will likely be on the uptrend this week," she said.

"Better-than-expected Chinese manufacturing data and the weakening of the dollar... will be a boost to prices," Lee added.

The China Federation of Logistics and Purchasing (CFLP) on Friday released its purchasing managers index (PMI) showing a pick-up in manufacturing activity in September, rising to 53.8 in September from 51.7 in August.

A separate PMI, compiled by the London-based bank HSBC, also showed Chinese manufacturing growth accelerated in September.

In the US, the Wall Street Journal reported Thursday that the US central bank was considering the purchase of long-term Treasury securities to adapt to the changing pace of the recovery.

Last week the Fed's policy committee said it was "prepared" to step in if the economy falters.