SINGAPORE: Oil fell in Asia on Monday after official data showed China’s economy posted its slowest growth for more than six years in the third quarter, reinforcing worries about demand from the world’s top energy guzzler.
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 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 on the lookout for economic data from the United States and the eurozone expected to be released 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, US benchmark West Texas Intermediate for November delivery was down 10 cents to $47.16 and Brent crude for December fell 12 cents to $50.34 a barrel at around 3 a.m. local time.
Both contracts fell for four straight trading days last week before advancing Friday on the back of data showing a fresh decline in US oil exploration, which suggested lower output that could help ease the global oversupply.
Sanjeev Gupta, head of the Asia Pacific oil and gas practice at professional services firm
EY, said the market will also be seeking clues from a meeting of OPEC and non-OPEC technical experts in Vienna on Wednesday.
Oil-producer Russia said last week it was prepared to discuss output cuts during the meeting.