Brent, US crude fall on over­sup­ply, poor China data

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Crude oil fu­tures fell on Mon­day, touch­ing fresh multi-month lows af­ter dis­ap­point­ing data from China over the week­end showed ex­ports tum­bled in the world's sec­ond-largest econ­omy.

Ex­ports fell 8.3 per­cent in July, the big­gest de­cline in four months, as weaker global de­mand for Chi­nese goods and a strong yuan pol­icy hurt man­u­fac­tur­ers.

Pro­ducer prices in July were at the low­est point since late 2009, dur­ing the af­ter­math of the global fi­nan­cial cri­sis, and have been slid­ing con­tin­u­ously for more than three years.

China's econ­omy is of­fi­cially forecast to grow at 7 per­cent this year, strong by global stan­dards, but some econ­o­mists be­lieve it is grow­ing at a much slower pace.

"The trade data over the week­end would prob­a­bly have the mar­ket a lit­tle un­easy," said Mark Per­van, se­nior com­modi­ties strate­gist at ANZ in Mel­bourne.

Brent LCOc1 was down 24 cents at $48.37 a bar­rel at 0537 GMT, af­ter touch­ing a more-than-six-month low of $48.26. U.S. crude CLc1 fell 21 cents to $43.66 and fell to $43.35 ear­lier, a nearly- five- month low. Both bench­marks have fallen for six straight weeks, weighed down by chronic over­sup­ply and sag­ging de­mand.

"There are a hell of a lot of above­ground stocks, par­tic­u­larly U.S. stocks, set­ting a record or just com­ing off record lev­els," Per­van said, also point­ing to Ira­nian crude stored in tankers that is start­ing to come to mar­ket af­ter a re­cent land­mark nu­clear deal.

Oil­field ser­vices firm Baker Hughes said on Fri­day that the U.S. oil rig count had risen by six, adding to bear­ish sen­ti­ment for crude as it sig­naled pro­duc­tion could creep up from higher drilling ac­tiv­ity.

Drillers have added a to­tal of 32 oil rigs over the past three weeks. "They are very cre­ative," Per­van said, re­fer­ring to U.S. drillers. "They have the in­fra­struc­ture and tech­no­log­i­cal know-how to con­tinue to eke out small cost re­duc­tions on a pretty reg­u­lar ba­sis."

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