As concerns eased about a sharp economic slowdown in China- the world's biggest energy user, oil prices edged higher in Asian trade on Tuesday as per economictimes.com. This uptrend however, was capped by economic and political uncertainty in Europe amid a weaker euro that was helping dampen demand for dollar-priced crude. Brent North Sea crude for June inched up to US$118.8.
On Monday, an HSBC purchasing managers' index showed China's manufacturing activity contracted for a sixth straight month in April. This caused a decline in oil prices. Analysts, however, said there was a silver lining in the data that indicated recovering demand. The PMI reading was 49.1 in April, up from 48.3 in March, denoting an improvement but no return to expansion just yet. A reading below 50 indicates contraction while anything above 50 shows growth.
French President Nicolas Sarkozy lost a first-round presidential vote to Socialist Francois Hollande. This was followed by the collapse of the Dutch government, making investors apprehensive about the situation in Europe. Spain -- one of the eurozone's beleaguered economies -- also plunged back into recession in the first quarter of 2012. It seems that the eurozone crisis, that has brought with it deep budget cuts, mass unemployment and civil unrest, is much deeper than thought.