BS: Brent Crude Declines on Concern China Growth Slowing
Brent crude declined for the third time in four days after China’s finance minister damped speculation that the government will boost economic stimulus. West Texas Intermediate fell in New York.
Futures dropped as much as 0.9 percent in London. Growth in the world’s second-largest oil consumer faces downward pressure, China’s Lou Jiwei said, adding there won’t be major changes in policy in response to individual economic indicators. A separate gauge tomorrow may show manufacturing in China slowed for a second month. Libya’s Sharara oil field may resume production tomorrow, Mansur Abdallah, oil movement director at the connected Zawiya refinery, said today by phone.
“Worries about China have increased,” Hannes Loacker, an analyst at Raiffeisen Bank International AG in Vienna, said by e-mail. “China’s oil demand growth is on track to be healthy in the second half at 3.5 percent to 4 percent. If growth shrinks to 2 percent or so, that would bring additional pressure for oil prices.”
VIDEO: New Data Has China Growth Under Threat
Brent for November settlement slid as much as 84 cents to $97.55 a barrel on the London-based ICE Futures Europe exchange and was at $97.62 at 11:20 a.m. local time. The volume of all futures traded was about 49 percent below the 100-day average for the time of day. Prices have decreased 12 percent this year.
WTI for October delivery, which expires today, slid 46 cents to $91.95 a barrel in electronic trading on the New York Mercantile Exchange. The more-active November contract was 34 cents lower at $91.31. The U.S. benchmark crude was at a discount of $6.32 to Brent for the same month, compared with $6.74 on Sept. 19.
China Economy
An index of China’s factory output probably fell to 50 in September, a Bloomberg News survey showed before a preliminary reading from HSBC Holdings Plc tomorrow. That would be down from 50.2 for August. China will account for about 11 percent of world oil demand this year, compared with 21 percent for the U.S., the International Energy Agency forecasts.
VIDEO: Brent Crude Falls Below $100 Per Barrel: Bloomberg Brief
“China is the key and growth has slowed there more than expected and will take a while to recover,” Christopher Bellew, senior broker at Jefferies International Ltd., said by e-mail. “Oil has further to fall because of weak demand. The trend is down, in spite of the onset of winter and continuing supply issues in Libya and Iraq.”
In Libya, the Zawiya refinery remains closed after a rocket attack last week, Abdallah said yesterday. The connected Sharara oil field halted as a precaution.
Libya is working to restore crude output after a year of unrest reduced it to the smallest producer in the Organization of Petroleum Exporting Countries.
STORY: What Do China's Leaders Worry About? Jobs, Jobs, and Jobs
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
