West TX Oil Below $94 as Market Awaits Chinese Data
Brent crude fell on Monday for a third day of losses even though Chinese trade data showed both better-than-expected exports and weak imports that might prompt help for the economy, but it remained below $101 a barrel after poor U.S. jobs data.
Chinese exports climbed 9.4 percent in August from a year before, the General Administration of Customs said. Economists polled by Reuters had forecast a rise of 8 percent. However, imports fell 2.4 per cent.
Oil markets had initially reacted positively to that sign of economic weakness since it raised the possibility of the authorities implementing a “mini-stimulus” to provide support, said Victor Shum, senior partner at oil consultancy Purvin & Gertz.
“The Chinese data, with imports showing disappointing results, indicates the domestic economy remains quite weak. That continues to raise concerns about the recovery of the Chinese economy,” Shum said
Brent fell 7 cents to $100.75 a barrel as of 0703 GMT after briefly hitting $101 a barrel in choppy early morning trade. The benchmark had fallen $1.01 to settle at $100.82 a barrel on Friday, to record its third weekly drop in four.
U.S. crude slipped 2 cents to $93.27 a barrel after settling at $93.29 on Friday for its sixth weekly drop in seven.
Brent and U.S. crude futures both fell more than $1 on Friday after U.S. nonfarm payrolls rose by just 142,000 in August, well below a forecast 225,000, casting doubt on the pace of growth in the world’s biggest oil-consuming economy.
China imported 25.19 million tonnes of crude oil in August, up 6 percent from 23.76 million the previous month, according to data from the General Administration of Customs.
Imports of oil products rose 36 percent to 2.53 million tonnes while exports of oil products rose 18.2 percent to 2.73 million tonnes.
“Chinese data is slightly positive for prices,” said Ben Le Brun, a market analyst at Sydney’s OptionsExpress.
Oil prices trended higher during the Asian trading session but slipped when London opened.
China’s crude oil imports should remain strong for the rest of the year due to lower refinery maintenance, “but growth should slow as there are fewer refineries coming online and we anticipate weaker inventory builds”, Citi analysts said in a note.
Investors are keeping an eye on wider geopolitical concerns in Europe and the Middle East, especially on the impact the tensions could have on European demand.
But in the absence of major geopolitical shocks, oil prices are expected to be rangebound, Shum said. “I expect Brent to hover around the $100 level,” he said, with U.S. crude trading at a $7 discount.
A ceasefire between Ukraine and pro-Russian separatists started to fray on Sunday as shelling resumed near the port of Mariupol and fighting broke out on the outskirts of rebel-held Donetsk, killing one woman and wounding four other people.
The European Union is expected to implement a further round of sanctions against Russia over the Ukraine crisis on Monday, which could target oil company Rosneft, units of Gazprom and 24 individuals.
President Barack Obama will brief lawmakers and make a televised address this week to explain how the United States will tackle the threat posed by Islamic State militants who have overrun swathes of Iraq and Syria.
Fighting flared between rival groups in Benghazi and near the Libyan capital, Tripoli, on Sunday, killing at least 15 people and leading to fears the OPEC producer will turn into a failed state.
Source: CNBC
