Brent Remains Below $97 On Weak Chinese Data
Brent crude oil hovered near last week’s two-year low and traded at $96.38 at 5:50 GMT.
The commodity has been under pressure recently as a global supply glut continued to grow while some of the world’s largest consumers struggled to kick start their economies.
Over the weekend, Chinese data showed that the nation’s industrial profits lost 482.56 million yuan, or 0.6 percent in August. The figures were a big change from July’s 12.5 percent increase and surprised as they marked the nation’s first drop in industrial profits since August 2012.
The data added to a growing list of Chinese economic data that suggests the number two oil consuming nation’s economy is not yet on solid ground.
However, Reuters reported that a poll of analysts predicted that China’s manufacturing sector leveled out in September, a positive sign for the nation. The poll showed that analysts were optimistic and saw factory orders remaining steady.
Meanwhile, the growing conflict in the Middle East has been broadly overlooked by oil markets. A U.S.-led coalition continued with airstrikes over the weekend, destroying three ISIS-held oilfields in northern Syria, something the U.S. hopes will cut off some of the group’s funding.
Still, reports that the group is continuing to advance towards the border of Turkey are troubling and suggest that the U.S. and its allies are in for a long, drawn-out fight.
Moving forward, investors will be keeping an eye on OPEC as the group’s November meeting approaches. While several members, including Saudi Arabia, have downplayed the recent drop in crude prices, others, like Iraq, have called for a cut to output in order to bring prices back above $100.
Most nations from the organization require prices to be above $100 in order to balance their budgets.
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