Brent Oil Drops Below $100 after Chinese Data
Oil tumbled by $1 on Monday, with Brent sliding below $100 a barrel for the first time in more than a year and West Texas Intermediate tumbling to near its lowest of 2014, as Chinese and U.S. data pointed to slower-than-expected growth in the world’s top oil consumers.
Weak economic growth combined with ample supply has pushed oil prices down from a high for the year above $115 hit in June, complicating efforts by central banks to ward off deflation and putting pressure on the budgets of major oil producers.
Brent crude fell nearly $1 to $100, rebounding slightly from an earlier low of $99.36 a barrel, its lowest since May 1, 2013. U.S. crude fell 63 cents to settle at $92.66 a barrel, its weakest close since January 14. Disappointing U.S. nonfarm payrolls data cast doubt on the pace of growth in the world’s biggest oil-consuming economy.
Monday’s price fall followed data showing China’s import growth fell unexpectedly for the second consecutive month in August, posting its worst performance in over a year as domestic demand faltered.
It was the second straight month of weak import growth, raising concerns that tepid domestic demand exacerbated by a cooling housing market is increasingly weighing on the economy.
“The bears are in control,” said Bill Baruch, senior market strategist at iitrader.com. “It will be pivotal to see if U.S. crude ends below $92.50 today. If we do, there will likely be some more selling.”
OPEC sources said the group sees the fall below $100 as short term. Saudi Arabia and other OPEC members have previously said they prefer oil above $100.
Source: CNBC
