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Crude oil futures dip on China slowdown concerns

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Forexpros - Crude oil futures were down for a second day on Thursday, after data showed that manufacturing activity in China fell to a 28-month low in July, raising concerns over a slowdown in demand from the world's second largest oil consumer.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD97.92 a barrel during European morning trade, shedding 0.5%.

It earlier fell as much as 0.75% to trade at a daily low of USD97.67 a barrel.

The Markit/HSBC Chinese manufacturing purchasing managers' index fell to a 28-month low of 48.9 in July, indicating activity was now beginning to contract in the world's second largest economy.

"We expect industrial growth to decelerate in the coming months as tightening measures continue to filter through," Qu Hongbin, HSBC Chief Economist for China, said following the report.

China is the world's second largest crude oil consumer, with the International Energy Agency forecasting that China will account for approximately 40% of global oil demand growth in 2012.

Data showing that German manufacturing output fell to a 21-month low in July, while manufacturing activity in the euro zone slumped to the lowest since August 2009 also weighed.

Energy traders pay close attention to manufacturing numbers, as they are used to gauge future oil demand growth.

Meanwhile, in the U.S., a proposal for a USD3.7 trillion debt-cutting plan faced resistance from House Republicans, adding to fears over a potential default ahead of the August 2 deadline to lift the country's USD14.3 trillion debt ceiling.

President Barack Obama planned to renew talks at the White House with congressional leaders as the Democratic-led Senate and Republican-controlled House intensify efforts to reach an agreement to avert a default.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery edged 0.45% lower to trade at USD117.65 a barrel, up USD19.73 on its U.S. counterpart.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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