West TX Oil Drops to $91.30 after Russia Sanctions
Brent crude slumped to a more than two-year low under $97 per barrel on Monday as a slew of lackluster economic data from China, the world’s top energy consumer, cast a shadow on the outlook for oil demand amid abundant global supplies.
Analysts have warned of a potential hard landing at the world’s No.2 economy after the country’s factory output grew at its slowest pace in nearly six years last month, stoking fears of lower oil demand growth in the key consumer.
October Brent, which expires on Monday, fell to as low as $96.21 a barrel, the lowest since July 2, 2012. The contract recovered to $96.57 by 0411 GMT, down 54 cents. November Brent <LCOc2> was down around 49 cents at $97.47.
U.S. crude was at $91.27 a barrel, down $1, after slipping earlier to $90.63 – near a 16-month low of $90.43 hit last week.
“Obviously economic growth in China is one of the key drivers of world growth and generally of oil demand,” Ric Spooner, chief market analyst of CMC Markets in Sydney said.
“As it currently stands, it seems likely that the (oil) demand growth won’t keep up with the growth in supply capacity.”
The Chinese data, which includes a drop in power generation for the first time in four years, came on the heels of downward revisions in 2014-2015 global oil demand growth by the International Energy Agency last week.
On the supply front, Libya’s oil production is expected to rise to 1 million barrels a day in October.
Source: CNBC-U.S. crude oil futures
