Crude Oil Futures Decline After US, China Data

   on September 10 2012 2:48 AM
  • Crude Oil
    A worker holds a cup of crude oil to be tested at the Cenovus Foster Creek SAGD oil sands operations near Cold Lake in Alberta, Canada. Reuters
  • Oil futures
    Crude oil prices advanced in Asian trading Thursday as better-than-expected Chinese trade data reinforced signs of economic recovery. Reuters
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Crude oil futures declined slightly Monday as weak economic reports from the U.S. and China weighed on the sentiment.

Light sweet crude for October delivery declined 0.24 percent or 23 cents to $96.19 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours while Brent crude oil futures for October delivery gained 0.14 percent or 16 cents to $114.41 a barrel on the ICE futures exchange in London.

Disappointing U.S. jobs data and a batch of worse-than-expected data from China sparked concern that demand could slow down in the world's largest and second largest oil consumers. However, expectations of a stimulus from the U.S. and China limited the downward move.

The data released Sunday by the National Bureau of Statistics showed that industrial production in China grew at a slowest rate for 39 months in August while fixed asset investment, which accounts for half of China's net economic growth, rose 20.2 percent between January and August in comparison to the same period last year as compared to analysts' expectation of 20.4 percent expansion.

China also reported a trade surplus of $26.66 billion in August amid the slower-than-expected growth in exports and imports, raising the concern that the world's second largest economy was not doing enough to stimulate the economy and avert a slowdown.

Chinese President Hu and Commerce Minister Chen said over the weakened that new measures will be announced to boost domestic demand and trade, but given lack of sufficient policy initiatives after similar past comments markets are unlikely to jump on the remarks. Still, hopes that Chinese policy makers will eventually turn the economy around should provide some support for sentiment, said a note from Credit Agricole.

Meanwhile, market participants are awaiting the U.S. Federal Reserve's Federal Open Market Committee interest rate decision Thursday. After the introduction of the new bond-buying program by the ECB, investors are hoping the weak jobs data will force the Fed to announce further measures when it closes its two-day meeting.

Light sweet crude for October delivery gained 0.9 percent or 89 cents Friday and settled at $96.42 a barrel on the New York Mercantile Exchange. Brent crude oil rose 90 cents to settle at $114.39 a barrel.

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