Mubasher: Oil prices fell on Monday as China’s economic outlook remained weak even with improving manufacturing figures, while the persisting trade conflict with the US dragged fuel demand down, according to Reuters.

By 10:53 am GMT, US Nymex crude futures fell by 1.04% to $55.33 per barrel (pb), while global benchmark Brent futures dropped by 1.24% to $61.14 pb.

The official purchasing managers’ index (PMI) gauging manufacturing sector rose to 49.8 in September, rising from 49.5 in August, but still remaining below the 50-point threshold that separates expansion from contraction.

The PMI data “[indicated] economic fundamentals were still weak,” a note by Citi bank analysts was quoted by Reuters.

The government in China, the world’s second biggest oil consumer, is expected to ramp up fiscal and monetary measures to reinvigorate domestic demand.

However, those steps “can help stabilise, probably not accelerate, economic growth,” the note said.

On the supply side, Saudi Arabia managed to restore capacity to 11.3 million barrels per day (bpd) after the attack on its oil facilities which have slashed its production into half, Reuters reported, citing sources.

While the world’s top exporter maintained its exports through using stockpiles and spare production capacity, how much was actually restored will be determined in the next few weeks, according to Singapore-based Phillip Futures senior commodities manager Avtar Sandu.

This came along with a warning by Saudi Arabia’s Crown Prince on Sunday against a spike of oil prices to “unimaginably high numbers,” should the world fail to unite to deter Iran, saying he would prefer a political solution rather than a military action.