Commodity traders Monday shrugged off positive economic news from the U.S. and China as they appeared to focus on an International Energy Agency report suggesting that demand for oil will slow over the next five years.
U.S. consumer spending on goods and services rose in September by 1.1 percent, the U.S. Department of Commerce reported Monday, a gain that reflected increased gasoline consumption. Such increased consumer demand usually leads to an increase in oil prices as more fuel is used the make or move goods to market.
Meanwhile, China’s trade data released Saturday showed a modest rebound in imports of 2.4 percent in September after a slight contraction in August. China’s demand for goods is a key indicator of the country’s consumer sentiments. With Europe in the doldrums and a slowdown in emerging economies, China’s demand for imports is being closely watched as the country’s overall economic activity has slowed this year.
But neither the U.S. nor Chinese reports appeared to influence oil traders.
Light sweet crude for November delivery settled Monday afternoon at $91.86 per barrel, exactly where it closed Friday. Last week, the price gained 2.2 percent, but it lost 21 cents on Friday after an International Energy Agency report predicted a decline in global oil demand over the next five years, citing a combination of sluggish economic activity and increased efficiencies, as well as unexpected increases in supply from shale formations in the U.S. and oil exports from Iraq.
"The world remains short of oil demand while the oversupply of oil continues. Global inventories are building, and, barring a sharp turnaround from China or any of the other major oil growth areas of the world, demand currently looks like it is going to lag supply," Dominick Chirichella of CME Group wrote Monday in a market commentary.