Oil prices tumbled more than 7 percent on Tuesday in volatile trading that sent Brent futures back below $50 a barrel as weak Chinese data revived concerns about demand for petroleum after crude's three-day rally of more than 20 percent. China's official Purchasing Managers' Index (PMI) dropped to 49.7 in August from 50.0 in July, reinforcing fears about slowing growth. "It was primarily the China fear factor," Carsten Fritsch at Commerzbank in Frankfurt told the Reuters Global Oil Forum. Other data showed U.S. manufacturing sector growth slowed in August to its weakest pace in more than two years, adding to concerns about faltering economic activity. Brent crude LCOc1 was down $4.10 at $50.05 a barrel at 1:10 p.m. EDT having fallen as low as $49.72. Brent climbed $4.10, or 8.2 percent on Monday, extending its rally to a third day as oil prices recovered from their lowest levels since the global financial crisis. On Aug. 24, Brent fell to a 6-1/2-year low at $42.23 intraday as plunging Chinese equities markets battered global markets. U.S. crude CLc1 was down $3.53 at $45.67, having slumped as low as $45.22 after Monday's 8.8 percent gain. The CBOE's crude oil volatility index .OVX rose nearly 10 percent intraday on Tuesday, trading at its highest since March. Monday's rally was fueled by Energy Information Administration (EIA) revised data showing U.S. oil output peaked at just above 9.6 million barrels per day (bpd) in April before falling by more than 300,000 bpd over the following two months. "Even with the EIA revision, we're still producing over 9 million barrels per day, so I'm not convinced we've seen the fundamental shift to justify the rally," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut. Some traders on Monday cited lift for prices from a commentary in the OPEC Bulletin publication suggesting the group is more willing to talk to non-OPEC producers about curbing output, even though it was broadly in line with previous comments. A weaker dollar index .DXY provided no support for oil on Tuesday. The dollar's weakness often supports dollar-denominated commodities because they are less expensive for consumers using other currencies. Investors awaited fresh snapshots of U.S. oil inventories due from industry and government starting with the American Petroleum Institute's report at 4:30 p.m. EDT on Tuesday. Crude oil and gasoline stocks were expected to have fallen last week, according to a Reuters survey of analysts. http://english.ahram.org.eg/News/139460.aspx
