* Chinese PMIs point to moderating economic growth
* Oil sell-off exacerbated by trades after long weekend
* For a technical view, click: []
* Coming Up: U.S. construction spending for April; 1400 GMT
(Updates detail, comment, graphics)
By Christopher Johnson
LONDON, June 1 (Reuters) - Oil fell below $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 $1.40 to $72.57 per
barrel by 0802 GMT, after trading above $75 earlier.
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 $1.50 to a
low of $72.79, down $1.86, before recovering a little to around
$72.90 by 0802 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 figures were 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.
Manufacturing activity in the euro zone expanded in May at a
considerably more sluggish pace than April's 46-month high, a
survey showed on Tuesday. []
Stock markets slid on Tuesday with creeping suspicion that a
peak in the pace of 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
For a graphic of commodity prices so far this year:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
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, officials
say, as the company begins preparations on a new but uncertain
attempt to contain the leaking crude. []
Shares in BP <BP.L> slid as much as 15 percent at one point,
wiping 14 billion pounds ($20.4 billion) off the value of what
was once Britain's biggest company and taking total losses in
market capitalisation since April 20 to 44 billion pounds ($64.2
billion). []
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)
