US oil fall longest in 29 years after China data
LONDON – US oil prices headed for their eighth consecutive week of falls on Friday, the longest losing streak since 1986, after a sharp drop in Chinese manufacturing increased worries over the health of the world’s biggest energy consumer.
Activity in China’s factory sector shrank at its fastest pace in almost 6-1/2 years in August as domestic and export demand dwindled, adding to worries about lower consumption of crude in the second-biggest oil user.
Asian stocks followed Wall Street lower as fears took hold of a China-led slowdown in global growth.
Both global oil benchmarks are near 6-1/2-year lows, with US crude heading for its longest weekly losing streak in 29 years.
“The market is stuck in a relentless downtrend,” said Robin Bieber, a director at London brokerage PVM Oil Associates.
“The trend is down – stick with it.”
In late 1985, oil prices slumped to $10 from around $30 over five months as OPEC raised output to regain market share following an increase in non-OPEC production.
US crude for October delivery was 25 cents lower at $41.07 a barrel by 1005 GMT. On Thursday, the September US crude contract saw its lowest intraday trade since March 2009 at $40.21 a barrel before it expired at the market close.
Brent oil was on track for its seventh weekly decline in eight, down 30 cents at $46.32 a barrel, after settling 54 cents lower on Thursday.
“Weighing on prices is the continued ample supply with crude oil builds in the US and OPEC pumping at record levels,” said Michael Poulsen at Global Risk Management. “Fear of slowing growth in China is increasing.”
The dollar fell on receding expectations of a US interest rate rise in September, providing some support for oil.
But technical charts for almost all the big oil futures markets looked bearish, PVM’s Bieber said.
US crude inventories continued to rise last week, as imports rose and shale production fell more slowly than anticipated, despite dropping prices. [EIA/S]
“The only silver lining we are seeing coming from the United States is that refining rates remain high and that crude production continues to fall,” Daniel Ang at Singapore-based Philip Futures said. –Reuters