Oil prices fall after weak Chinese data

INQUIRER FILE PHOTO

SINGAPORE – Oil prices fell in Asia Monday after a sharp slowdown in Chinese industrial production raised concerns about slackening demand in the world’s top energy consumer, analysts said.

US benchmark West Texas Intermediate for October delivery eased $1.06 to $91.21, while Brent crude for October fell 63 cents to $96.48 in mid-morning trade.

“Oil has come off a fair bit as investors are taking in the weak Chinese industrial production data released over the weekend,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.

“The figure feeds into the continuing story about slowing demand in China,” he added.

China said Saturday that industrial production grew 6.9 percent last month, its weakest rate since December 2008.

The key indicator slumped from 9.0 percent growth in July and was also well short of the 8.7 percent median increase in a survey of 15 economists by The Wall Street Journal.

The figures add to worries about the world’s number two economy – a key driver of world commerce- following recent indicators suggesting growth is weakening even after limited stimulus measures.

McCarthy said dealers are also eyeing the impact of fresh Western sanctions on Russia for its alleged role in the Ukrainian insurgency.

In punitive measures announced Friday, the United States targeted Russia’s top bank Sberbank as well as leading energy and technology companies.

Fresh European Union measures were also aimed at major Russian energy, finance, and defense companies, including, oil giant Rosneft.

“The fresh sanctions may hurt oil demand in the longer term, but generally they remain a secondary concern for investors at the moment,” McCarthy said.

Russia, accused of supporting armed separatist rebels in eastern Ukraine, is the world’s number-two oil producer, while Ukraine is a key conduit for Moscow’s natural gas exports to Europe.