Oil prices drop on Chinese, US data
World oil prices slid on Monday, hurt by poorly-received economic data from China, the world’s top energy consuming nation, traders said.
A strong dollar and signs of increasing US oil production added further pressure to prices, which have already been depressed by a global oversupply of crude.
US benchmark West Texas Intermediate (WTI) for September delivery fell 64 cents to $47.50 a barrel.
Brent North Sea crude for September dropped 94 cents to stand at $53.68 a barrel in London midday deals.
“The strengthening of the US dollar, weak manufacturing data from China and rise in the US rig count added to the woes of a weak crude market,” said Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at professional services organisation EY.
The Chinese government on Monday said profits of major industrial firms slipped 0.3 percent year-on-year in June to 588.57 billion yuan.
On Friday the preliminary reading of Caixin’s Purchasing Managers’ Index (PMI) — an independent survey of China’s manufacturing activity — came in at 48.2 for July, the weakest reading since 48.1 in April 2014.
Shanghai shares meanwhile suffered their biggest one-day decline in more than eight years Monday, plummeting 8.48 percent in defiance of government efforts to prop up the market.
In a sign of drillers ramping up production, US producers added 21 oil rigs last week, according to oil services firm Baker Hughes.
Adding to downward pressure on prices are expectations the US Federal Reserve will start raising interest rates before the end of the year.
This is helping to strengthen the greenback and making oil, which is priced in dollars, more expensive to holders of weaker currencies.
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