Oil prices fall in Asia as China slowdown weighs
The government said gross domestic product (GDP) for the world’s second-biggest economy rose 6.9 percent in the three months to September, beating market forecasts but still the worst since the global financial crisis in 2009.
Growth in China’s industrial production, which measures output at factories, workshops and mines, also dropped sharply to 5.7 percent year-on-year in September, the government said.
“Although China’s retail sales turned out strong, industrial-related data remained weak. This would likely be weighing down on commodity usage in China,” Daniel Ang, an investment analyst with Phillip Futures in Singapore, said in a market commentary.
“With weak Chinese industrial production, we may see Chinese manufacturing PMI worsen, thus leading to weaker oil prices,” he said, referring to the forward-looking Purchasing Managers’ Index to be released later this week.
The market will also be watching economic data from the United States and the eurozone expected this week.
“Considering the expectations for both China and eurozone, we could see US being the tie-breaker between oil bulls and bears. US data has not been exceptionally strong, and thus could mean that oil prices could be facing some headwinds towards the end of the week,” Ang said.
In Asian trade the US benchmark West Texas Intermediate for November delivery was down 36 cents to $46.90 and Brent crude for December had fallen 27 cents to $50.19 a barrel.
Both contracts fell for four straight trading days last week before advancing Friday after data showed a fresh decline in US oil exploration, which suggested an easing of global oversupply.
Sanjeev Gupta, head of the Asia Pacific oil and gas practice at professional services firm EY, said the market would also be seeking clues from a meeting of OPEC and non-OPEC technical experts in Vienna on Wednesday.
Russia said last week it was prepared to discuss output cuts during the meeting.