Oil prices slide on China worries, supply glut
Crude oil futures fell on Friday, bringing losses this month to close to 9 percent, as disappointing Chinese data and worries over a supply glut overshadowed geopolitical concerns.
The U.S. dollar, which stood close to nine-month highs versus a basket of other currencies, also weighed on oil. Strength in the greenback makes oil more expensive for holders of other currencies.
Brent crude fell by 60 cents to $44.86 per barrel by 1007 GMT, after settling down 71 cents at $45.46 in the previous session.
West Texas Intermediate (WTI) futures, the U.S. crude benchmark, fell by $1 to $42.04 per barrel.
Both crude contracts were on track for small weekly gains, but were down by roughly 9 percent since the beginning of November.
“The Chinese statistics this morning are weighing,” said Bjarne Schieldrop, chief commodities analyst at SEB in Oslo.
Profits earned by Chinese industrial companies fell 4.6 percent in October from a year earlier, data from the country’s statistics bureau showed on Friday. A potential regulatory crackdown was also looming.
Worrying economic indications in the world’s largest energy consumer typically filter quickly to oil prices, particularly given the nagging global surplus of physical oil
But Schieldrop added that the shooting down of a Russian jet by the Turkish military this week had also morphed from a geopolitical risk concern into worries about falling oil demand due to potential economic sanctions.
“Rather than being bullish…it’s now bearish for marginal demand,” Schieldrop said.
Russia threatened economic retaliation against Turkey on Thursday and said it was still awaiting a reasonable explanation, but Turkey dismissed the threats as “emotional” and “unfitting”.
The market is also shifting its focus to a meeting of ministers from the Organization of the Petroleum Exporting Countries, which is set for Vienna on Dec. 4.