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Oil futures slump 1% after China economic growth cools

Published 19/10/2015, 09:37
© Reuters.  Crude oil futures slump as China Q3 GDP growth falls
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Investing.com - Crude oil futures fell on Monday, after data showed China's economy expanded at its slowest pace since 2009 in the third quarter.

On the ICE Futures Exchange in London, Brent oil for December delivery shed 69 cents, or 1.37%, to trade at $49.77 a barrel during European morning hours. On Friday, Brent futures tacked on 73 cents, or 1.47%.

Elsewhere, crude oil for delivery in December on the New York Mercantile Exchange dropped 50 cents, or 1.05%, to trade at $47.22 a barrel. Nymex oil prices rose 85 cents, or 1.81%, on Friday.

Official data released earlier showed that China’s economy grew 6.9% in the third quarter, slightly better than forecasts of a 6.8% rise but down from growth of 7.0% in the previous three months. The figure is the country's slowest growth rate since the 2009 global financial crisis.

A separate report showed that industrial production rose by an annualized rate of 5.7% in September, below expectations for a 6.0% increase and following a gain of 6.1% in the preceding month.

Data on fixed asset investment also missed forecasts, reinforcing views that Beijing will roll out further support measures soon for the world's second largest economy.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Ongoing worries over the health of the global economy fueled concerns that a global supply glut may stick around for longer than anticipated.

The oil market has been volatile in recent months amid uncertainty about how quickly the global glut of crude is set to shrink. Despite this tighter outlook for North America, output remains robust in other countries.

According to industry research group Baker Hughes (N:BHI), the number of rigs drilling for oil in the U.S. decreased by 10 last week to 595, the seventh straight weekly decline. Over the prior six weeks, drillers had cut 70 rigs.

However, Saudi Arabia and other Gulf OPEC members have indicated in recent months that they will continue to stick to their policy of defending market share by keeping production high.

A meeting of OPEC technical experts in Vienna on October 21 may shed further light on the group's position of maintaining production at current levels as prices remain muted.

Oil prices have lost nearly 60% since last summer as lingering concerns over a glut in world markets drove down prices.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $2.55 a barrel, compared to $2.74 by close of trade on Friday.

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