NEW YORK CITY: Oil prices fell sharply on Monday (Tuesday in Manila) on renewed concerns about China’s cooling economy after data showed the weakest growth in more than six years and falling industrial production.
US benchmark West Texas Intermediate for November delivery tumbled $1.37 to $45.89 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for December delivery, the global benchmark, closed at $48.61 a barrel in London, down $1.85 from Friday’s settlement.
The futures contracts resumed last week’s steep downturn that slashed more than four percent off their prices amid concerns about the global crude-oil oversupply.
China, the world’s second-biggest economy, said its gross domestic product rose at a 6.9 percent annual pace in the third quarter, marginally above market forecasts but still the weakest growth since the first quarter of 2009. GDP had expanded at a 7.0-percent rate in each of the two prior quarters.
Beijing also reported that industrial production growth dropped to 5.7 percent year-on-year in September.
The data are “raising concerns about Chinese demand at a time when normally demand globally is weakening because we’re in the shoulder season,” said Phil Flynn of Price Futures Group, referring to the period between the northern hemisphere summer and winter.
“Although China’s retail sales turned out strong, industrial-related data remained weak. This would likely be weighing down on commodity usage in China,” including oil, said Daniel Ang of Phillip Futures in Singapore in a market commentary.
The market also was looking ahead to a meeting of OPEC and non-OPEC technical experts in Vienna on Wednesday, amid a push by some producers including Venezuela for action to raise prices.
However, on Monday the chair of Libya’s National Oil Corporation, Mustafa Sanalla, said the OPEC member can “easily” increase daily crude output to two million barrels a day from only 440,000 barrels currently, if the country’s security situation improves.
UN envoy Bernardino Leon has put forward proposals for the power-sharing government, but both Libya’s internationally recognized parliament and the Islamist-backed assembly have balked at the appointments.