Oil slips as US data weigh on demand outlook
NEW YORK — Oil futures sank on Tuesday as weak US economic data dimmed crude’s demand outlook and pressured prices, while reports of a thirdquarter decline in output from the world’s largest oil producers kept oil from falling further.
Brent crude futures settled at $58.89 a barrel, a 36-cent loss, while US West Texas Intermediate (WTI) crude settled at $53.62 a barrel, down 45 cents. The daily slides followed a session in which both benchmarks posted their largest quarterly declines of the year.
Oil pared some losses in postsettlement trade after American Petroleum Institute data showed crude stocks unexpectedly fell last week by 5.9 million barrels, compared with analysts’ expectations for an increase of 1.6 million barrels.
US manufacturing dropped to a more than decade-low in September as the US-China trade war weighed on exports, according to a survey from the Institute for Supply Management (ISM). The ISM manufacturing activity index showed a reading of 47.8, shrinking for the second straight month and below economists’ expectations of 50.1. A reading below 50 indicates contraction.
Oil futures sank along with equities after the factory data for the world’s largest economy.
“Negative ISM manufacturing data clobbered the stock market with spillover into the oil,” said Jim Ritterbusch of Ritterbusch and Associates. “As overseas economic weakening slowly morphs into the US, additional downward revisions in forecasted global oil demand for this year and next will likely be forthcoming.”
Oil prices had rallied as a Reuters survey found crude production in September from the Organization of the Petroleum Exporting Countries (OPEC) fell to 28.9 million bpd, down 750,000 bpd from August’s revised figure and the lowest monthly total since 2011.
Output at the world’s two largest producers, the US and Russia, also fell in July and September respectively. Russia’s output declined to 11.24 million bpd in Sept. 1-29 from 11.29 million bpd the previous month, sources said, although it remained above quotas set in an output deal between Russia and OPEC.
US crude oil output fell 276,000 bpd in July to 11.81 million bpd as federal offshore Gulf of Mexico production slid, the US Energy Information Administration reported on Monday. —