UPDATE 8-Oil down on weak Chinese, euro zone data
* China's March factory activity shrinks - HSBC Flash PMI
* France, German PMI falls sharply
* Iran watched, South Africa stops oil imports
* U.S. weekly jobless claims drop to 4-year low
By Gene Ramos
NEW YORK, March 22 (Reuters) - Oil fell 1 percent in light activity on Thursday, dragged down by manufacturing data from China and the euro zone showing a drop in new orders that spurred fresh concerns about global fuel demand.
Factory activity in China, one of the biggest engines of global oil demand growth, shrank in March for a fifth straight month, with the rate of contraction accelerating and new orders sinking to a four-month low.
The report put oil markets, which have been balancing concerns about global demand against the potential loss of Iranian crude supplies, on a bearish trajectory in Asian trading. Prices dropped further after data showed a sharp fall in French and German factory activity that even the most pessimistic economists, eyeing the euro zone's debt woes, failed to predict.
"There's a bit of a China backlash at the moment, and we should expect more turbulence as people assess whether China is heading for a hard or a soft landing," said Filip Petersson, commodity strategist at SEB in Stockholm. Continued...