Oil market steady amid weak Chinese data

Global oil prices held steady on Monday as traders worried that contracting Chinese manufacturing activity could hit global demand for crude. Brent North Sea crude for delivery in October added nine cents to $114.66 a barrel just after midday. New York's main contract, light sweet crude for October dropped 15 cents to $96.32 per barrel. Low trading volumes are expected throughout Monday, with US financial markets closed for the Labor Day public holiday. "As the week gets underway, oil prices are again shedding some of the gains they achieved on Friday in the wake of disappointing economic data from China," said Commerzbank analyst Carsten Fritsch. China's manufacturing activity fell to its lowest level in more than three years in August as the global economic slowdown continues to weigh on the world's largest exporter, HSBC said Monday. The final reading of the British banking giant's closely-watched purchasing managers' index (PMI), which gauges nationwide manufacturing activity, slid to 47.6 last month from 49.3 in July, HSBC said in a statement. This was the lowest since March 2009 and marked the tenth consecutive monthly fall, the bank said. It chimed with the official PMI figure released Saturday, which hit a nine-month low of 49.2 from 50.1 in July. A PMI reading above 50 indicates expansion, while one below 50 points to contraction. Fritsch meanwhile predicted that the oil market would bounce back later this week on hopes of central bank stimulus measures. "Speculation about stimulus measures to be taken by central banks should cause prices to rise during the course of the week despite gloomier economic prospects. "Hopeful of central bank measures, speculative financial investors are increasingly betting on rising prices."