Saturday 22 October 2016

Oil plunges once again on poor economic data

Devika Kumar/Reuters

Published 02/02/2016 | 02:30

Oil prices slid almost 7pc yesterday. Photo: Gabriela Maj/Bloomberg
Oil prices slid almost 7pc yesterday. Photo: Gabriela Maj/Bloomberg

US crude oil prices slid almost 7pc yesterday, pressured by weak economic data from China, a US forecast for mild weather and growing doubts that OPEC would act to reduce the swelling global supply glut.

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Chinese manufacturing contracted in January at the fastest pace since 2012, adding to worries about energy demand from the world's largest energy consumer.

"China is the last standing consumer of oil outside of the US. The problem is that everyone is relying on it," said Carl Larry, director of business development at Frost & Sullivan in Houston.

"As long as we keep in this scenario where China is the only real consumer to pick up the pace, we're going to see moves lower every time China has an issue with its economy."

A mild US winter has also dented demand for oil. Forecasts for warm temperatures through mid-February sent US New York Harbor heating oil futures down 5pc.

West Texas Intermediate (WTI) - the US benchmark - slid to its biggest daily loss in five months, down 6.9pc to an intraday low of $31.29 in volatile afternoon trading. That was still 19.5pc higher than the more than 12-year low of $26.19 hit in mid-January.

Irish Independent

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