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February 8, 2015

Weak trade data from China forces oil to drop to $57.55 a barrel

The price of Brent crude oil dropped on Monday due to weak trade data from China.

The price of Brent crude oil dropped on Monday due to weak trade data from China.

Reuters reported that the worldwide benchmark Brent crude oil for March was down 25 cents at $57.55 a barrel and US crude was up 15 cents at $51.84 a barrel.

China’s trade performance worsened in January, as exports dropped 3.3% and imports fell by 19.9%.

"China’s trade performance worsened in January, as exports dropped 3.3% and imports fell by 19.9%."

Phillip Futures’ Daniel Ang was quoted by the news agency as saying: "When China stops filling up its SPR (strategic petroleum reserves), it would definitely put a bearish note to prices."

Preliminary customs data for January stood at 27.22 million tonnes of crude imports.

Prices, however, got support from declining US oil rig counts and indications of strong US economic growth.

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Earlier this month, data from Baker Hughes revealed that energy firms hit by lower crude prices have cut rig counts, with the number of US rigs drilling for oil down by 61 in the week to 9 January.

The price of Brent crude increased by more than 9% last week and the North Sea oil futures contract has grown more than 18% in the last two weeks.

Reuters added that stronger-than-expected growth in the US jobs market in January helped support oil, as non-farm payrolls increased by 257,000.

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