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Oil prices drop on China data, firmer dollar
[SEOUL] Crude oil futures fell on Friday with losses this month standing at over 8 per cent, hurt by disappointing Chinese economic data and worries over a supply glut.
A firmer US dollar also weighed on oil, making greenback-denominated contracts more expensive for holders of other currencies. Although trading was quiet after Thanksgiving Day in the United States.
Brent crude had dropped 4 cents to US$45.42 per barrel by 0240 GMT, after settling down 71 cents at US$45.46 in the previous session.
West Texas Intermediate (WTI) futures, the US crude benchmark, fell 50 cents, or 1.16 per cent, to US$42.54 per barrel. They are up 5.3 per cent so far this week, but have plunged 8.7 per cent since the beginning of the month.
Profits earned by Chinese industrial companies fell 4.6 per cent in October from a year earlier, data from the country's statistics bureau showed on Friday, declining for the fifth consecutive month.
ANZ said in a note on Friday that "US stocks data did little to excite the market", referring to numbers from the Energy Information Administration on Wednesday which showed US crude inventories rose 1 million barrels last week, slightly below analyst expectations.
The market is shifting its focus to a meeting of ministers from the Organisation of the Petroleum Exporting Countries, which is set for Vienna on Dec 4.
Russian Energy Minister Alexander Novak said on Thursday that Russia and Saudi Arabia would set up a special joint working group on oil and gas cooperation to promote energy dialogue between the world's top oil producers.
Both Brent and US crude have gained compared with last week's closes due to geopolitical risks in the Middle East after Turkey's shooting down of Russian warplane.
Russia threatened economic retaliation against Turkey on Thursday and said it was still awaiting a reasonable explanation, but Turkey dismissed the threats as "emotional" and"unfitting".
But some said Middle East geopolitical risk was unlikely to push oil prices higher.
"The well supplied crude market, record high inventories in OECD and lack of material threat to oil facilities in the Middle East from the military escalation against IS in Syria are going to prevent geopolitical premiums building in oil prices," BMI said in a note.
Asian shares held firm and US stock futures edged higher in early trade on Friday as expectations of additional stimulus from the European Central Bank underpinned appetite for riskier assets, while the euro hovered near seven-month lows.