Brent Continues To Tumble As Economic Data Fails To Support Global Recovery
Brent crude oil dipped below $70 to start the week as the commodity continued to free-fall following OPEC’s decision not to implement a cut. The commodity traded at $68.60 at 8:30 GMT on Monday morning as investors looked to economic data for any indication that the global economy could pick up.
OPEC last Thursday decided not to make any changes to its output, effectively pitting the cartel’s members against each other in a price war. The decision not to cut, though expected, caused oil prices to tumble as demand for the commodity has been far surpassed by the global supply.
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Data out on Monday showed that China’s business activity had fallen in November, a worrying sign that the manufacturing giant’s economy was not on the path to improvement. CNBC reported that the world’s second-largest oil consumer had a PMI reading of just 50.3 in November, a decline from October’s 50.8 and dangerously close to the 50 mark that denotes contraction.
With economic data around the world continuing to show weakness in some of the world’s largest oil consuming economies, most expect to see Brent prices continuing to drop. The global marketplace is saturated with crude and without any demand drivers, the commodity’s prices will probably continue to fall.
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