Oil Prices Fall as Markets Weigh China’s Weak Economic Data

Oil Prices Fall as Markets Weigh China’s Weak Economic Data

Oil prices declined on Friday, pressured by a stronger dollar, weak economic data from China, and expectations of rising global supply. The markets anticipate Chinese imports to reduce as factories decline amidst the OPEC group plan to increase output.

Brent crude was trading at $63.96 per barrel, down 0.07% from the previous close of $64.01. US benchmark West Texas Intermediate (WTI) also decreased by 0.11% to $60.06, compared to $60.13 in the prior session.

The US Federal Reserve (Fed) on Wednesday cut its policy rate by 25 basis points, as expected, to a range of 3.75%-4%. However, Fed Chair Jerome Powell raised doubts about another cut in December, saying it is not a “foregone conclusion.”

The US dollar strengthened after Powell emphasized caution and noted that further rate reductions were not certain, adding pressure on oil prices.

The strong dollar is expected to lower demand by making oil more expensive for those who use foreign currencies. In China, reports showing a contraction in manufacturing activity in October also added to the downward pressure.

China’s factory activity contracted for the seventh consecutive month in October, the government said Friday, as a newly announced truce in the trade war between the U.S. and China offers some hope for a stronger recovery in exports.

The official manufacturing purchasing managers’ index slipped to 49 in October from 49.8 in September, worse than forecast, the China’s National Bureau of Statistics reported, based on a survey of factory managers. Measured on a scale between 0 and 100, a PMI reading below 50 indicates contraction.

Meanwhile, US commercial crude oil inventories fell by about 6.9 million barrels last week to 416 million, a much larger draw than the expected 900,000 barrels.

Strategic petroleum reserves, excluded from commercial inventories, grew by 500,000 barrels to 409.1 million. Gasoline inventories declined, falling 5.9 million barrels to 210.7 million.

Markets are focused on the Nov. 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+. The group is expected to announce an additional production increase of 137,000 barrels per day for December. #Oil Prices Fall as Markets Weigh China’s Weak Economic Data Unilever Nigeria Grows Profit by 100% to N21.98bn in 9M-2025