Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil falls as slowing China economy dents markets

CommoditiesJan 21, 2019 05:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Pumpjack is seen at the Sinopec-operated Shengli oil field in Dongying, Shandong

By Amanda Cooper

LONDON (Reuters) - Oil prices fell on Monday, in line with weaker stock markets after evidence that economic growth in China, the world's second largest crude consumer, eased in 2018.

Brent crude oil futures (LCOc1) were last down 35 cents on the day at $62.35 a barrel by 0946 GMT, while U.S. crude futures (CLc1) were down 23 cents at $53.57 a barrel.

The broader financial markets were weaker after data showed China's 2018 economic growth slowing to the weakest in 28 years, at 6.6 percent versus 6.8 percent in 2017.

Although the slowdown was in line with expectations and not as sharp as some analysts had expected, the cooling of the world's No.2 economy casts a shadow over global growth.

"It remains quite likely that the trade spat with the U.S. has played a part in this latest slowdown, but investors should also factor in that it simply isn’t possible for the Chinese economy to grow at the pace that it has over the last 10 years, in the next 10 years, as the law of diminishing returns kicks in, and the economy becomes more mature," CMC Markets chief market analyst Michael Hewson said.

While there is concern that a slowing global economy could impact oil demand growth and, therefore the price outlook, the production cuts implemented by the Organization of the Petroleum Exporting Countries (OPEC) would likely support crude oil prices, analysts believe.

"You can't justify oil prices at these levels. We're looking basically at an average of almost $70 a barrel for Brent in 2019," ING commodities strategist Warren Patterson said.

"I am getting increasingly concerned about how tight the market will be going into 2020."

A separate report from China's National Bureau of Statistics on Monday showed crude oil refinery throughput climbed to a record 12.1 million barrels per day (bpd), up 6.8 percent from the previous year.

In the United States, energy companies cut the number of rigs drilling for oil by 21 in the week to Jan. 18, taking the total count down to 852, the lowest since May 2018, energy services firm Baker Hughes said in a weekly report on Friday.

It was biggest decline since February 2016, as drillers reacted to the 40-percent plunge in U.S. crude prices late last year. However, U.S. crude oil production still rose by more than 2 million bpd in 2018, to a record 11.9 million bpd.

With the rig count stalling, last year's growth rate is unlikely to be repeated in 2019, although most analysts expect annual production to average well over 12 million bpd.

GRAPHIC: U.S. rig count slows, output rises - https://tmsnrt.rs/2NsKwpc

Oil falls as slowing China economy dents markets
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Sanju Kpl
Sanju Kpl Jan 21, 2019 9:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
even then the price of oil is rising
David Bowie
Defcon2 Jan 20, 2019 10:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"China's economy grew by 6.6 percent in 2018." It's still growth.
King Power
King Power Jan 20, 2019 10:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wanting us to stay long you say?
Gold Traderz
Gold Traderz Jan 20, 2019 10:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Depends, if it drop 5 cents or if it is up 3 cents
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email