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Oil prices drop on China demand worries
[SINGAPORE] Oil prices fell in early trading in Asia on Monday as analysts expected weaker demand from China in upcoming months.
Benchmark US crude futures were down 41 cents from their last settlement at US$46.18 per barrel at 0025 GMT. Internationally traded Brent futures were at US$49.33 a barrel, down 23 cents.
Monday's falls came after gains made last week following a further decline in the US oil rig count which indicated that domestic crude production could drop in coming months.
But in Asia, the possibility of slowing demand in China dominated trade on Monday, with growth faltering in the world's No.2 economy. "Weak economic data out of China will likely keep any gains in commodity prices limited," ANZ said.
Barclays said that China's oil demand growth for September, adjusted for inventories, slowed to 226,500 barrels per day (bpd), or 2.1 per cent, compared with the same month last year, much lower than the 6.3-per cent gain registered for the first three quarters of the year.
"The strong demand data in the first eight months was inconsistent with the observed slowing macroeconomic activity, while the weak number in September better reflected real demand," the bank said. "Fundamentals suggest moderate demand ahead, in our view," it added.