Oil prices drop on weak US, China data

LONDON—Crude oil prices fell on Monday, hit by weak economic data in the United States and China, the world’s two biggest consumers of energy, analysts said.

New York’s main contract, light sweet crude for delivery in October, dropped $1.57 to $84.88 a barrel.

In London, Brent North Sea crude for October shed $1.05 to $111.28.

“Jobs data in the US for August indicates that job markets may be stalling, and some data from China also shows reduced economic growth,” Victor Shum, an analyst at energy consultants Purvin and Gertz, told AFP.

The highly awaited US non-farm payrolls report released last Friday showed that the economy of the world’s largest oil consumer created no jobs in August, leaving the unemployment rate at a stubbornly high 9.1 percent.

“Elsewhere global growth concerns have been exacerbated further overnight by the weaker than expected HSBC China Services PMI for August which dropped to 50.6 from 53.5 in July,” said Lee Hardman, an economist at The Bank of Tokyo-Mitsubishi UFJ.

“It is the lowest level since the (manufacturing) survey began,” he added.

The head of the World Bank, meanwhile, urged China on Monday to rebalance its export-driven economy and said taming rising inflation remained the most important challenge for the country in the short term.

Robert Zoellick said that China, the world’s second-biggest economy, would have to focus more on domestic demand, and warned that the coming months would be a “sensitive time” for many of the major developed economies.

“It’s hard for me to see that a continued reliance on export-led and investment-led growth will work for China over the next 10 years,” he told journalists at the end of a five-day official visit to China.

“And that challenge will even become clearer if the major developed countries have a hard time resuming their growth. So China needs to rebalance its economy, rely on more domestic demand, and increase consumption.”