SINGAPORE: Oil prices turned lower in Asian trade Friday owing to lingering concerns over China's economy, analysts said.
New York's main contract, West Texas Intermediate (WTI) for delivery in September, eased three cents to $105.46 a barrel in afternoon trade, while Brent North Sea crude for September tumbled six cents to $107.59.
Prices had risen slightly in the morning on a weaker greenback, which makes dollar-priced oil cheaper and more attractive to buy.
But worries over China returned to the fore, analysts said.
"The China factor is important and there's just more and more data showing that the economy is slowing," said Victor Shum, managing director at consultancy IHS Purvin and Gertz.
"China is expected to account for a majority of oil demand going forward and with a slowing Chinese economy, gains in oil futures will be limited," he added.
"At this point, oil futures are overvalued so we are seeing downside risks."
The latest data out of China on Wednesday showed the country's manufacturing activity contracted to an 11-month low in July, according to an HSBC survey.
HSBC said its preliminary purchasing managers' index (PMI) hit 47.7 this month, down from a final 48.2 in June and the lowest since August.
The index tracks manufacturing activity in China's factories and workshops and is a closely watched gauge of the health of the economy. A reading below 50 indicates contraction, while anything above signals expansion.
China's economy has been weakening this year, with growth in the April-June period dipping to 7.5 percent, from 7.7 percent in the first quarter and 7.9 percent in October-December.
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