Investing.com - Crude oil prices plummeted on Tuesday in Asia as China reported disappointing export and import figures from August with incoming goods such as oil getting hit hard.
In China. August exports fell 6.1%, a tad more than the 6% seen and imports slumped 14.3%, compared to an expected 8.2% drop. The trade surplus came in at $60.24 billion, better than the $48.2 billion seen.
The trade surplus was the second highest on record, suggesting capital outflows in August may have been even worse than was suggested by the $93.9 billion drop in foreign exchange reserves last month.
Weak imports suggest exports in the coming months aren't likely to improve given that half of China's foreign trade is in importing raw materials and parts from abroad for assembly before exporting them again.
The August data argues for fresh policy easing, with the yuan exchange rate now in play following the devaluation on the 11th of that month. The PBOC is understood to have pushed the yuan onto the depreciation path last month because of pressure from government agencies which argued that a weaker currency was needed to restore trade competitiveness.
Crude oil for delivery in October on the New York Mercantile Exchange dropped 3.40% to $44.49 a barrel.
Overnight, Crude oil futures declined on Monday, as ongoing concerns over the health of the global economy underlined worries over a global supply glut.
Trade volumes were expected to remain light on Monday, with U.S. markets closed for the Labor Day holiday.
On the ICE Futures Exchange in London, Brent oil for October delivery slumped 89 cents, or 1.8%, to trade at $48.72 a barrel during U.S. morning hours. On Friday, Brent futures tumbled $1.07, or 2.11%.
London-traded Brent futures lost 44 cents, or 0.88%, last week, amid fears of a China-led global economic slowdown.
Oil prices have been under heavy selling pressure in recent months amid concerns over a growing glut in world markets. Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the OPEC last year not to cut production.
Industry research group Baker Hughes (NYSE:NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. decreased by 13 last week to 662, the first weekly decline in seven weeks.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $3.47 a barrel, below Friday's level of $3.56.
Most Asian markets ended lower on Monday, as investors monitored wild swings in China's equity markets.
The Shanghai Composite, which reopened after a four-day extended weekend, took investors on a roller coaster ride, rising almost 2% after the open, only to turn negative after the midday break to end down 2.5%.
China's National Bureau of Statistics revised down the 2014 GDP growth rate to 7.3% from the previously announced 7.4% on Monday. For this year, China has set a growth target of about 7%, the slowest pace in 25 years.