Brent Under Pressure, Falls To $81
Brent crude oil fell even further on Wednesday as poor economic data fueled worries about the global economic slowdown. The commodity traded at $81.85 at 7:45 GMT as the global supply glut continued to weigh on prices.
On Tuesday, Brent was weighed down by news that Saudi Arabia had cut its oil prices for the United States, a signal that the nation is working to gain market share. The decision to cut prices showed Saudi policy makers’ commitment to maintaining a position as a supplier in the United States even as the U.S. shale boom brings down prices.
Brent prices were also under pressure as OPEC’s annual meeting approached on November 27. The cartel is still divided over whether to cut output and boost prices as some members are willing to accept Brent’s low prices in order to gain market share, but others want a supply cut to restore prices.
Meanwhile, economic data out on Wednesday helped push prices even lower as the slowdown in China looked set to continue. CNBC reported that service sector data from China was weak, with a survey showing that new business died down. The nation's HSBC/Markit services PMI came in at 52.9 in October, down from 53.5 in September and China's lowest reading since July.
Moving forward investors will be watching for U.S. inventory data, due out later in the day. The U.S. Energy Information Administration is set to release a report on the nation's crude and gasoline stockpiles, something that will give investors a better picture of the No. 1 consumer’s demand.
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