Oil prices have declined after China recorded its lowest quarter of economic growth due to a trade war with the US.
Global benchmark Brent crude oil futures fell by $0.34, to $59.57 a barrel, while US West Texas Intermediate (WTI) crude futures were down by $0.12, to $53.81 per barrel, reported Reuters.
China’s gross domestic product (GDP) reduced to 6% year-on-year in the third quarter of this year, the slowest pace since the first quarter of 1992, due to ongoing trade tensions with the US. Meanwhile, crude demand is likely to follow economic growth. The slowing GDP has already replaced China’s record refinery production in the investors’ minds.
In September 2019, refinery throughput increased by 9.4% from a year earlier to 56.49 million tonnes. The rise is also due to resumption of operations post maintenance at some of the independent refineries.
CMC Markets Sydney chief market strategist Michael McCarthy told Reuters: “A shock to traders and oil trading volumes are low.”
Adding to this pressure, crude inventories in the US surged last week due to a fall in refinery output to a two-year low, while gasoline and distillate fuel inventories decreased, as reported by the Energy Information Administration (EIA).
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Crude stocks rose by 9.3 million barrels in the week ending 11 October, compared with the analysts’ presumption for an increase of 2.9 million barrels.
McCarthy added: “It’s a bit of tough time for markets because we have questions about supply and demand. Last night’s EIA data was a bit of surprise.”