Oil is trying to rally despite the fact that Chinese manufacturing is showing a significant contraction. Perhaps the reason is that it increases the likelihood that the Chinese government, which has been putting the squeeze on the banks, will lighten up. On the other hand, maybe it was because the U.K. manufacturing numbers were stronger than expected. Despite the bearish fundamentals, oil continues to die-hard.
The HSBC's purchasing managers' index dropped to a stunning 48.2 reading that was even lower than the disappointing 49.2 May reading. The China Federation of Logistics and Purchasing also showed that activity declined to 50.1 from the May reading of 50.8.
In The U.K. PMI, hit 52.5 in June, the highest level since May 2011 and up from 51.5 last month. On top of that the May index was revised from an originally reported 51.3. Yet according to MarketWatch "Unemployment in the Eurozone hit a record high in May, as the region continued to grapple with recession. The percentage of those out of work in the Eurozone was 12.1% in the month, up from 12% in April and a marked drop from the 11.3% recorded in May last year, according to EuroStat, which released the figures on Monday. The highest rates in the 17-country euro-zone were in Spain and Greece, with jobless rates of 26.9% and 26.8% respectively. Across the wider 27-member EU, unemployment was stable compared with April, at 10.9%, but down from 10.4% a year ago. Joblessness increased in 17 of the EU states and fell in 10, according to EuroStat. People less than 25 years old bore the brunt, as youth unemployment hit 23% in the EU and 23.8% in the euro zone in May, with Greece top at 59.2%."
Brent Crude is also getting some support on problems with the Buzzard oil field. WTI is getting support on a rising euro. But also we can see some report from the protests in Egypt. Reuters reported that "Millions of Egyptians flooded into the streets on the first anniversary of Islamist President Mohamed Mursi's inauguration on Sunday to demand that he resign in the biggest challenge so far to rule by his Muslim Brotherhood. Waving national flags and chanting "Get out!" a crowd of nearly 500,000 massed in and around Cairo's central Tahrir Square in by far the largest demonstration since the 2011 uprising that overthrew Mursi's predecessor, Hosni Mubarak. “The people want the fall of the regime!" they shouted, echoing the Arab Spring rallying cry that brought down Mubarak — this time yelling it not against an ageing dictator but against the first elected leader in Egypt's 5,000-year recorded history. Huge protest rallies continued late into the night in a mostly festive atmosphere.”