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Oil slides on China trade slump, but crude imports remain high

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - fell by almost 1 percent on Monday, with Brent crude slipping below $60 per barrel, after Chinese data showed weakening imports and exports in the world's biggest trading nation and second-largest

International Brent were at $59.91 per barrel at 0403 GMT, down 57 cents, or 0.9 percent from their last close.

U.S. Intermediate (WTI) crude futures were down 47 cents, or 0.9 percent, at $51.12 a barrel.

China's December overall exports fell by 4.4 percent from a year earlier, the biggest monthly drop in two years, official data showed on Monday, pointing to further weakening in the world's second-largest economy. Imports last month also contracted, falling 7.6 percent, the biggest decline since July 2016.

"Crude futures were back in the red as trading began for a fresh week in Asia, in tandem with most of the region's stock markets ... (as) early Monday reported $351.76 billion trade surplus in dollar terms for 2018, the lowest since

2013," said consultant of in a note on Monday.

The weak trade figures confirm a raft of indicators that have been pointing to an economic slowdown since the second half of 2018.

"price inflation has decelerated for six consecutive months, adding to other signs of cooling industrial activity (in China) amid weakening global demand," rating agency said in a note.

Traders said the data pulled down and Asian stock markets alike, which had both posted modest gains earlier on Monday.

Economic research firm TS Lombard said were capped as "the world economy is now slowing ... limiting the scope for positive surprises in and hampering inventory reduction."

Ole Hansen, at Denmark's Saxo Bank, said "the deterioration seen recently in forward-looking economic data from the U.S. to and China" meant that the upside for was likely limited to $64 per barrel for Brent and for $55 for WTI.

Despite the weak Chinese trade data, the country's remained sky-high in December at 10.31 million barrels per day (bpd), holding above the 10 million bpd mark for the second month in a row, on stockbuilding by small independent refiners who were trying to use up annual quotas.

Amid this strong demand from the world's biggest oil importer, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC allies, including Russia, have been cutting supply since late 2018, providing crude prices with some support.

In the United States, drillers cut four in the week to Jan. 11, bringing the total count down to 873, services firm said in a weekly report on Friday.

(Reporting by Gloystein in Singapore; editing by and Christian Schmollinger)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 14 2019. 09:37 IST