Brent crude oil slumps to lowest in over 2 years on China anxiety
The firm US dollar and meager economic data from China, the biggest oil consumer worldwide, resulted in yet another slide for Brent crude oil; the latter sank to its lowest level in over two years.
On Monday, Brent crude oil briefly slumped to below $97, a more than two-year low. The reason was weaker than expected economic data coming from China, the largest scale oil consumer worldwide.
The prospects for China’s demand weigh on oil sentiment. China’s industrial production headed down to its lowest level since the pre-crisis period, as Saturday’s data pointed. Further dampening the outlook were reports on retail and real estate sales. The most recent figures enhanced the pressure on Beijing towards stepping up stimulus to boost growth.
According to the National Bureau of Statistics data, the rise in industrial production was 6.9% for August, compared to a year earlier. For the previous month the reading was 9.0%, given the analysts’ median forecast of 8.8%.
For non-rural China, fixed-asset investment marked a 16.5% rise compared to a year earlier, which was slightly less than the July 17.0% increase. Retail sales rose by 11.9% in a year, still lagging behind the July 12.2%.
Later this week, the Federal Reserve’s policy meeting will be in the focus of investors who will be carefully listening for any clues on when the Fed would commence raising interest rates. The greenback, standing firmer, is still taking its toll on dollar-denominated commodities. The US dollar index, currently at 84.33, is pretty close to last Tuesday’s 84.51, a 14-month high.
The West Texas Intermediate for October delivery, declined with 0.88%, to last trade at $91.46 per barrel on the New York Mercantile Exchange. On London’s ICE Exchange, the 0.56% decline in Brent crude oil for October delivery resulted in a price of $96.57 per barrel.
