Oil mixed as traders await China data, Opec meeting

Oil prices were mixed today as investors awaited manufacturing data from China ahead of an OPEC meeting on production caps.

Volumes were thin after Wall Street and London's financial markets were closed yesterday.

Dealers expect Chinese manufacturing data due on Wednesday to set the tone at mid-week.

China is the world's largest energy consumer so any indication of how its economy is performing acts as a key driver for oil prices.

"If the number is positive, it should help in prices as China is one of the drivers for the commodity," CMC Markets trader Alex Wijaya told AFP.

"Major markets were closed yesterday so there wasn't much of a driver for prices. Today should be pretty quiet as well."
 
At about 0900 IST, US benchmark West Texas Intermediate (WTI), for delivery in July, was up 24 cents at $49.57 a barrel. Brent North Sea crude for July was down two cents at $49.74.

Oil prices dipped yesterday after comments from the US Federal Reserve head Janet Yellen suggested interest rates could rise soon if the world's top economy continues to improve.

The expectation of a US rate rise pushed up the greenback, hurting dollar-denominated oil by making it more expensive for buyers with weaker currencies.

But the currency pared gains on Tuesday, providing some support for crude ahead of a meeting of the Organization of the Petroleum Exporting Countries (Opec) in Vienna on June 2.

Gatherings of some of the world's biggest producers are always closely watched by oil traders, but few are expecting a deal to cap production will be eked out after similar efforts failed in April.

Iran, a key member of Opec, has said it has no plans to join any output freeze by other major crude producers after returning to world oil markets in January with the lifting of Western sanctions.

"I think the general sentiment is that traders do not have much expectations for an Opec agreement," Wijaya said.

"Given all the major developments so far, traders are not expecting any major surprises."

Crude prices briefly topped the psychological $50 a barrel last week for the first time this year as production disruptions in Canada and Nigeria eased short-term concerns about abundant global supplies.

But prices remain less than half of their 2014 peaks due to a glut of world supplies that experts predict could last for years.