Mubasher: Oil prices fell on Friday after new Chinese economic data raised again worries about a growth slowdown, while a faster-than-expected return of Saudi supply this week assuaged fears of substantial disruptions, Reuters reported.
By 7:34 am GMT, US Nymex crude futures fell by 0.44% to $56.16 per barrel (pb), while global benchmark Brent futures rose by 0.72% to $62.29 pb.
Nymex dropped by 3.3% so far this week, which was the biggest weekly loss in 10 weeks, while Brent fell by 3.2% on week, the largest drop in seven.
Industrial companies in China reported shrinking profits last August, reversing July’s brief growth, due to stuttering demand and the trade conflict with the US took a toll on balance sheets.
“Oil prices continued to slide lower after a drop in China’s industrial profits in August reinforced worries that the world’s second-largest economy continues to decelerate,” OANDA senior market analyst Edward Moya was quoted by Reuters as saying.
Demand was also dragged down as details related to the impeachment probe into US President Donald Trump emerged.
“Trump’s impeachment inquiry also raises uncertainty surrounding his foreign policy,” CMC Markets analyst Margaret Yang Yan said.
The market is still assessing how Trump’s ability to slap more sanctions on oil-rich Iran could be affected by the current political uncertainty, which ultimately will impact global oil output.
On the supply front, the quick return of crude production in Saudi Arabia, the world’s biggest exporter less than two weeks, weighed on risk premiums and oil prices, analysts told the news agency.
In mid-September, an attack on two oil installations, including crude processing facility, slashed Saudi output into half.
Moreover, another bearish factor was a surprise increase of 2.4 million barrels in the US crude stockpiles last week.
This came along with expectations of a buildup in the US inventories over the short term, which would further squash prices, as refineries scale back inputs for maintenance, analysts told Reuters.
