SINGAPORE: Brent crude eased below $108 a barrel on Thursday after data showed China's manufacturing activity continued to contract, weakening sentiment further in a market already reeling from Saudi Arabia's pledge to keep global oil prices low.
Saudi oil minister Ali-al Naimi last week said the world's top oil exporter was ready to take action to calm rising prices, which he said were not supported by market fundamentals.
"Saudi Arabia's commitment has been the biggest factor in the decline this week as a lot of money managers are cutting their long positions in oil after the statement," said Ken Hasegawa, a commodity sales manager with Newedge in Tokyo.
"China PMI data was also a big trigger and with the market already in a downtrend, we are seeing more profit-taking."
Brent November crude eased 38 cents to $107.81 a barrel, at 0456 GMT. The contract fell more than 3 percent to $107.40 a barrel in the previous session, the lowest since Aug. 3.
US October crude, which expires later today, was down $1.04 at $90.94 a barrel. The more actively traded November contract slipped $1.06 to $91.24 a barrel.
The HSBC Flash China manufacturing purchasing index (PMI) for September was 47.8, well below the 50-mark that separates contraction from expansion, although a shade higher than the nine-month low of 47.6 reached in August.
The Chinese data comes a day after the Ministry of Commerce said export outlook in the world's No. 2 oil consumer was poor and demand would remain weak in the next few months.
In the United States, crude oil stockpiles jumped 8.5 million barrels last week, far more than expected, data from the Energy Information Administration.
Copyright Reuters, 2012
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