Oil under pressure of slower Chinese growth

Economies.com
2018-12-14 13:30PM UTC

Oil prices maintained their losses in American trade on Friday under fears of slower economic growth in China and subsequent weak demand on oil, with other concerns that OPEC's output cuts might not be enough to balance the market. 

 

As of 12:44 GMT, US crude fell to $52.30 a barrel, while Brent slipped to $61.10 a barrel. 

 

US crude rose 3.2% yesterday off week lows, while Brent climbed 2.4% as US inventories fell. 

 

Otherwise, China reported a sharp slowdown in retail sales and industrial output in another negative sign for slower growth in the fourth quarter of the year after the GDP grew by the slowest pace in the third quarter since the financial crisis. 

 

China's refinery output also fell in November, another sign on lower demand and consumption. 

 

Last week, OPEC announced a deal with Russia to cut output by 1.2 million bpd starting January. 

 

OPEC will take care of 800 thousand bpd of cut, while other producers will cut 400 thousand bpd. 

 

However, the FGE company for energy consultation warned that OPEC's cuts might not be enough to rid the world of excess inventories. 

 

The company expects Brent to hover between $55 and $60, with US crude between $45 and $50. 

 

Later today, Baker Hughes will release data on the US oil rig count, after falling by 10 last week to a total of 877 rigs, the lowest since November 2. 

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