Brent Lower On Rising Inventories
Brent crude oil fell on Thursday morning after inventory data showed that U.S. crude rose more than expected in the week ending on October 17. The commodity traded at $84.30 at 8:00 GMT as oversupply worries out-shadowed improving economic data from some of the world's largest consumers.
On Wednesday, U.S. inflation data showed that the nation’s consumer prices were steadily increasing. The nation’s CPI figures beat expectations with a 0.1 percent rise in September compared to analysts’ forecast of no change.
China, the world’s second-largest oil consumer, also released some promising data this week, helping boost expectations for global demand. Earlier in the week the nation’s implied oil demand figure surprised by rising; on Thursday the country’s manufacturing PMI rose. CNBC reported that China’s HSBC/Markit manufacturing purchasing managers’ index rose to 50.4 in October from 50.2 in September.
The Chinese data plays a large part in investors’ expectations for oil demand as the nation’s economy makes up a significant part of the global economy. Recently, the China has been struggling to get its growth back on track and posted 7.3 percent GDP for the third quarter, far below Beijing’s 7.5 percent target.
However, the positive data from the United States and China was counterbalanced by U.S. crude inventory data which showed that the No. 1 consumer’s stockpiles increased significantly last week. The Energy Information Administration released a report showing that U.S. inventories were up by 7.1 million barrels last week, a huge jump from analysts expectations of a 2.7 million barrel increase. The figures confirmed that the global supply glut remained a problem for crude prices.
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