Global oil prices fall over concerns about China’s economy
Oil prices in international markets have gone lower over dealers’ concerns about poor trade data on China ahead of the weekly report on US crude stockpiles.
On Wednesday, every barrel of Brent North Sea crude for October delivery lost six cents to be sold for USD 49.46 in London deals.
Meanwhile, US benchmark West Texas Intermediate (WTI) for delivery in October shed 22 cents to be sold for USD 45.72 a barrel, AFP reported.
WTI prices had already fallen on Tuesday as oil trade slowed down following Monday’s closure of the New York Mercantile Exchange due to the Labor Day holiday.
“We are seeing trading volumes for oil futures down a third than on average. The market seems to have shrugged off the weak Chinese trade data and is now looking beyond that for cues,” Michael McCarthy, chief market strategist at IG Markets in Sydney, told AFP.
“We might see some movement … depending on how the US stockpile numbers turn out,” he added.
China announced on Tuesday that its exports had fallen 5.5 percent year-on-year in August while imports also decreased 13.8 percent. The announcement further fueled worries about the strength of the world’s number two economy and top energy consumer.
The slowdown in Chinese economic growth, along with a set of other weak indicators, has sent shockwaves through world markets.
The developments came as US Department of Energy is expected to release its weekly petroleum report on Thursday, a day later than usual as Monday was the Labor Day holiday.
According to a Bloomberg News survey of analysts, US crude reserves are likely to have risen by 250,000 barrels in the week ending September 4, which would be an indicator of lower demand for crude.
Dealers had hoped that an increase in US demand, along with a slowdown in crude production, could whittle down the global supplies that are considered a key factor for global oil price slump from around USD 120 in June last year.