* Chinese PMIs point to moderating economic growth
* Sell-off exacerbated by trades after long weekend
* For a technical view, click: []
* Coming Up: U.S. construction spending for April; 1400 GMT
(Updates throughout, changes dateline, pvs SINGAPORE)
By Christopher Johnson
LONDON, June 1 (Reuters) - Oil fell towards $73 on Tuesday,
erasing earlier gains, after industry data showed Chinese growth
had slowed, adding to concerns about global economic recovery.
China's factories scaled back production last month and
slowed the pace of hiring, the purchasing managers' index (PMI)
for May showed on Tuesday. []
U.S. crude for July delivery <CLc1> lost 94 cents to $73.03
per barrel by 0728 GMT, after trading above $75 earlier. Prices
have dropped 15 percent from an early-May peak.
Trade was thin and there was no settlement price on Monday
because of the Memorial Day holiday in the United States. The
New York Mercantile Exchange will combine Monday's and Tuesday's
trading sessions into one.
ICE Brent crude for July <LCOc1> fell more than $1 to a low
of $73.30, down $1.35, before recovering a little to around
$73.50 by 0728 GMT. It touched $68.15 a week ago, the lowest
intraday price for a front-month contract since Feb. 5.
China's PMI, an indicator of factory activity, compiled by
the China Federation of Logistics and Purchasing, fell to 53.9
in May from 55.7 in April, close to analysts forecasts of 54.0.
However, it stood above the threshold of 50 that demarcates
expansion from contraction for the 15th consecutive month.
"The Chinese data was not as good as expected and signals
slowing growth later this year," said Eugen Weinberg,
commodities analyst at Commerzbank in Frankfurt.
"Yesterday's holiday is also having a bit of an impact on
the speed of the move as traders are closing off positions that
they could not trade out of over the long weekend," he added.
DEBT CRISIS
U.S. crude posted its biggest monthly loss since 2008 in
May, losing more than 13 percent, after the European economic
crisis raised the prospect of reduced fuel demand.
Euro zone economic sentiment unexpectedly fell last month,
data showed on Monday, an indication that the region's debt
crisis has begun affecting the real economy. []
The euro and Asian stocks slid on Tuesday with creeping
suspicion that a peak in the recovery has passed and slowing
growth in China and Europe in the second half of the year will
be obstacles to risky trades. []
The relative strength index (RSI) for U.S. crude, a chart
indicator based on trading volumes that signals whether a price
drop or increase has gone too far, has now returned to average
levels, suggesting U.S. crude is no longer oversold.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of the RSI for U.S. crude:
http://graphics.thomsonreuters.com/gfx/CT_20100106130413.jpg
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Analysts say future oil supply could also be impacted by
decisions taken to restrict offshore drilling in the wake of the
giant slick from BP's <BP.L> blown-out Gulf of Mexico well, the
worst oil spill in U.S. history.
The oil spill may not be shut off until August, U.S.
government and BP officials say, as the company begins
preparations on a new but uncertain attempt to contain the
leaking crude. []
The environmental catastrophe led the U.S. government to
stop issuing new exploratory drilling permits in deep water for
six months and declare a ban that effectively idles operations
of 33 deepwater exploratory rigs for the same period.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Sue Thomas)
