Oil prices have shed most last week’s gains after weak Chinese Purchasing Managers’ Index (PMI) data fell for another month, adding to fears that the region as a whole slowing down. At the same time, lack of any clear indication about holding an emergency meeting to contain the oil price decline by OPEC has been weighing on the market.

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More Chinese weakness

China’s manufacturing activity dipped at its fastest pace in January since 2012. The preponderance of evidence pointing the contractions of the world’s second-largest economy has added to bearishness around crude oil. Brent crude, a global benchmark, is now trading at $35.90. U.S. West Texas International Crude is down over 3.5% to 32.39. The current trading level is critical to set a tone for the upcoming days as it can either sink back into sub-$30 level or march ahead from here.

No emergency meeting

Last week was full of developments that hinted at a near-term oil rally. Reports in Russia added to the speculative fever that OPEC’s key member Saudi Arabia had called for cooperation from Russia over the oil glut and that Russia had responded affirmatively. However, these speculations were put to an end by a statement from a senior OPEC representative, who ruled out any possibility of emergency talks in the near future. Beyond this, Iran has refused to cooperate in an output cut.

All these reversals have frustrated the global oil market, which is now flooded with close to $1 million barrels per day in excess supply. BMI Research has trimmed its oil price target to $40 per barrel from $42.5 per barrel for 2016. The research firm has outlined weakness in the Chinese Yuan, an oversupply of oil and continuing concerns over global economic growth as factors that will weigh over oil throughout 2016.