TV: Oil slides on Chinese demand concerns, record Russian output
Oil prices fell on Monday as weak Chinese economic data fuelled concerns about demand slowing in one of the world’s largest oil-consuming nations, while record-high production in Russia exacerbated the global supply glut.
Brent crude futures LCOc1, the global benchmark, traded down 55 cents at $49.01 a barrel at 0907 GMT. U.S. futures were trading at $45.95 a barrel, down 64 cents on Friday’s close.
“High OPEC production, record-high production in Russia and weak China data are driving prices lower,” said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
China’s factory activity fell for an eighth straight month in October, a survey showed, pointing at continued sluggishness in the world’s second-largest economy.
The global oil supply glut, which has more than halved oil prices since a peak in June last year, was underscored on Monday when Russia reported that its October oil production hit a post-Soviet record of 10.78 million barrels per day.
The data confirmed Russia’s strategy to defend its market share in the face of rivals from the Gulf starting to supply Moscow’s traditional markets.
Last week, a Reuters survey showed sector analysts expected oil prices to remain weak next year as OPEC will likely stick to its stance of maintaining record-high production when it meets on Dec. 4.
In the United States, the oil rig count dropped to its lowest since June 2010, data showed on Friday, adding to speculation that domestic crude production will fall in the coming months, potentially providing some respite for oil prices.
“It will still take a great deal of time to undermine the
massive surplus in crude oil inventories,” said Martin King, analyst at FirstEnergy Capital.
“As such, it is going to take a good deal of time for crude oil prices to march steadily higher, but the foundations are now more firmly in place.”
