Oil Prices Slip After China Data
Oil prices were moving lower on Monday as investors fretted about slower demand recovery amid Covid-19 pandemic effects and oversupply scenario.
Chinese GDP data missed forecasts, but improved industrial output and retail sales figures suggested that the world’s second-largest economy is marching toward normalization.
Benchmark Brent crude for December delivery dropped 31 cents, or 0.7 percent, to $42.62 a barrel, while U.S. West Texas Intermediate crude futures for November delivery were down 28 cents, or 0.7 percent, at $40.84.
Both Brent and WTI rose modestly last week after the U.S. reported a drop of 3.8 million barrels of oil in its commercial crude oil inventories during the week ended Oct. 9.
Concerns over surging coronavirus cases globally and tightening restrictions dampened the prospects for demand recovery.
Italy announced new measures after the country recorded a record daily increase of the Covid-19 cases for the fifth day in a row on October 18.
Elsewhere, Britain’s government scientific adviser Jeremy Farrar said the country needs to impose a three-week period of national lockdown restrictions to prevent the continued spread of the virus.
Investors are focusing on the Joint Ministerial Monitoring Committee (JMMC) meeting of the OPEC+ group scheduled for later today.
Against a backdrop of uncertain oil demand, the JMMC may decide whether it will delay plans to reduce its current supply cuts.
On the data front, China’s GDP grew 4.9 percent year-on-year in the third quarter of 2020, the National Bureau of Statistics said – missing forecasts for a gain of 5.2 percent but still up from 3.2 percent in the three months prior.
On a quarterly basis, GDP rose 2.7 percent – again shy of expectations for 3.2 percent and down sharply from the 11.5 percent gain in the previous three months.
Industrial production jumped 6.9 percent from a year earlier in September – beating forecasts for a gain of 5.8 percent and up from 5.6 percent in August.
Retail sales climbed an annual 3.3 percent, exceeding expectations for a rise of 1.8 percent following the 0.5 percent gain in the previous month.