CRANBURY, N.J. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and the July Brent contract on the Intercontinental Exchange were little changed in early trade for the first business day of May, straddling either side of Friday's settlement values as bullish economic data for the Eurozone was countered by slowed fuel demand in India amid spiking COVID-19 infections.
Manufacturing activity picked up pace in the eurozone in April after the collective economy fell into recession during the first quarter, with eurozone's manufacturing Purchasing Manager's Index up 0.4 points to a 62.9 record high, with the series beginning in June 1997. The final readings while below preliminary estimates suggest the collective European economy is emerging from a third wave of COVID-19 cases, with readings above 50 indicating growth.
France's manufacturing PMI was 58.9 in April with Germany's reading at a strong 66.2. Retail sales in Germany surprised to the upside despite lockdowns, with March sales up 7.7% in March compared with expectations for a 3% gain from an upwardly revised February 2.7% sales rate. March retail sales in Germany are up 11% from a year ago when the pandemic prompted global travel restrictions following a 6.6% year-on-year falloff in February.
The bullish data will be followed by manufacturing data from the United States due out later this morning, with the U.S. manufacturing PMI expected up 1.5 points to 60.6 for April, while the Institute of Supply Management's manufacturing index for April expected at a strong 66 following a 64.7 reading in March. March's ISM U.S. manufacturing index in March was the highest reading since December 1983.
Restraining enthusiasm for oil futures were spiking cases of COVID-19 infections in India that have overwhelmed the country's hospital system and are credited with curtailing Prime Minister Narendra Modi's political strength after his party lost seats in state elections conducted over the weekend. New infections are hovering near 400,000 a day, with John Hopkins reporting nearly 20 million cases of the virus in a country of 1.4 billion since the pandemic began and 218,959 deaths.
Modi and election officials are being blamed for accelerating the number of cases and deaths for not postponing the election or in setting guidelines for campaigning and political gatherings. While politically weakened, Modi remains firmly positioned as prime minister, with his term running through 2024.
Cases in India's COVID-19 variant that were reported in cities in China late last week have also been discovered in Indonesia, which is seen increasing travel restrictions in Asia were fuel demand was driving global growth in oil demand before the pandemic struck in 2020. Fuel sales are seen to have fallen by more than 10% in April from March, with increased travel restrictions expected to further dampen demand for fuel and crude imports. Reuters reports six cargos of liquified natural gas have been diverted away from India over the past two weeks to other destinations because of the spiking cases of COVID-19 that are slowing demand for gas in the country.
In early trading, NYMEX June West Texas Intermediate futures were up modestly at $63.75 per barrel (bbl), with the July Brent contract on ICE flat at $66.75 bbl. NYMEX June RBOB futures were down 0.0065 cent just below $2.07 gallon, with the June ULSD contract firming slightly to near $1.9250 gallon.
Brian L. Milne can be reached at email@example.com