SINGAPORE: Brent crude held steady above $103 a barrel on Monday, as a recent rebound in oil prices was checked by fresh data suggesting a slowdown in China's factory activity.
Oil prices on both sides of the Atlantic registered a second straight month of losses in August, although prices gained around $1 a barrel towards the end of the month.
Growth in China's factory sector slipped to a three-month low in August as foreign and domestic demand cooled, an HSBC survey showed on Monday. That may strengthen fears of a slowdown in demand for commodities, including oil.
"A fair bit of weak sentiment around China has already been priced in," said Ankit Pahuja, a commodity strategist at ANZ investment bank. "China has held to a 7.5 percent growth target, so the government does have plans to maintain growth across the next couple of quarters," Pahuja said. Brent crude for October delivery was 1 cent lower at $103.18 a barrel by 0416 GMT. The contract had gained 73 cents on Friday.
US crude traded 18 cents lower at $95.78 a barrel, after settling $1.41 higher.
Floor trading in the US is closed on Monday for the Labor Day holiday.
"Our view is that oil prices will strengthen a little over the next month or so. Markets have been a bit complacent regarding supply risks, and probably overestimated return in supply from places like Libya and Iran," Pahuja said.
Libya's oil production has ticked higher in recent months, rising to 700,000 barrels per day (bpd), state-run National Oil Corp (NOC) said on Sunday, putting it 50,000 bpd higher than what was reported early last week.
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