Oil prices have declined after witnessing heavy losses in the previous session, as weak Chinese economic data for two straight days added to concerns about the feasibility of the trade deal between the US and China.
Brent crude futures fell $0.47 to $58.88 a barrel, while US West Texas Intermediate (WTI) crude futures were at $0.40 to $53.19 a barrel, reported Reuters. According to the National Bureau of Statistics (NBS), China’s factory gate prices shrunk at the fastest pace in more than three years in September.
The trade war between the US and China also continued to cast a shadow on the economic growth worldwide, despite claims of progress towards an agreement. The impact was enough to outweigh any support that would be offered to oil prices from geopolitical tensions surrounding the Middle East.
Phillip Futures was quoted by Reuters as saying in a note: “Subdued global economic momentum has afflicted strong bearish bias on oil prices as traders deliberate demand-side weaknesses in the current term.”
US President Donald Trump has authorised sanctions against Turkey in response to its military aggression and demanded the Nato ally stop invasion into northern Syria. Furthermore, he called on Turkey President Recep Tayyip Erdogan to implement an immediate ceasefire in northern Syria.
Prices are expected to get a boost this week as investors are expecting a fall in the US crude stocks.
OANDA senior market analyst Edward Moya said: “This week … markets are expecting to see a draw (on) U.S. stockpiles and possibly further escalations in the Middle East.”