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Oil prices slip as China third-quarter GDP growth falls

Published 19/10/2015, 08:03
© Reuters. A gas station worker fuels a vehicle in Tokyo
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By Keith Wallis

SINGAPORE (Reuters) - Oil prices dipped on Monday as China's economic growth eased in the third quarter to grow at the slowest pace since the start of the global financial crisis, raising concerns about demand.

Brent for December delivery was down 27 cents at $50.19 a barrel as of 0648 GMT after settling up 73 cents on Friday. U.S. crude for November delivery fell 25 cents to $47.01 after finishing the previous session up 7 cents.

China's GDP figures showed growth slowed to 6.9 percent between July-September, beating analysts' expectations for 6.8 percent growth, but down on a 7 percent rise in the second quarter.

Quarter-on-quarter growth was 1.8 percent, the National Bureau of Statistics said, against market expectations of a 1.7 percent rise.

"The figures show nothing really concrete, although they err on the side of a little bit of weakness in the economy and the way is open for more stimulus," said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance.

Investors would likely wait for London and New York to set a direction for oil markets, he added.

Singapore's Phillip Futures said on Monday that while China's retail sales had turned out to be strong, industrial related data remained weak.

"With weak Chinese industrial production, we may see Chinese manufacturing PMI worsen, thus, leading to weaker oil prices for the week," the broker said in a note.

Investors are also waiting for preliminary manufacturing purchasing manager's index figures from the Eurozone and the United States on Friday

"Considering the expectations for both China and Eurozone, we could see U.S. being the tie breaker between oil bulls and bears," the Phillip Futures note added.

Data from the U.S. Energy Information Administration (EIA) last week showed U.S. crude inventories rose by 7.6 million barrels even as the U.S. rig count fell for a seventh week in a row last week fuelling concerns over global oversupply.

"It suggests again the world is awash with oil," Barratt said.

© Reuters. A gas station worker fuels a vehicle in Tokyo

Investors were also eyeing moves on Sunday by the United States and the European Union to take formal legal steps to lift sanctions on Iran once Tehran meets the conditions tied to a landmark nuclear agreement with major world powers.

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