Crude oil futures touched multi-month lows yesterday after a weekend of mixed data from China showing higher oil imports in July but weaker trade figures overall, hurting sentiment across the commodities markets.
Brent was down 19 cents at $48.42 a barrel at 0854 GMT, after touching $48.24 earlier in the session, the lowest in over six months.
US crude was down 18 cents at $43.69 after hitting an intraday low of $43.35 in Asian trading. Both benchmarks have been falling for six weeks, hampered by a supply glut.
China’s crude oil imports rose by 4.1 per cent in July from June, but this was offset by broader trade figures showing an 8.3 per cent slump in exports.
In addition, producer prices in July were at their lowest point since late 2009.
“The market is more focused on the general Chinese data which is very weak... it seems that economic activity in China continues to slow down,” said Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt.
The negative market sentiment was likely to continue until the supply side started to react
“That is weighing on oil prices regardless of the fact that oil imports were very strong.”
He added that China had probably taken advantage of lower oil prices to replenish stocks.
Since the start of August, however, there have been signs that Asian crude demand is slowing.
Olivier Jakob, an oil analyst at Petromatrix in Switzerland, cited the fact that the supertanker Sea King, which set off for South Korea with North Sea Forties crude in July, has since stayed in Europe.
He added that China was selling some Angolan cargoes and there had been talk of run cuts at Asian refineries.
Meanwhile, the global supply glut looks likely to persist with September North Sea loadings set to be the highest so far this year.
On Friday, oilfield services firm Baker Hughes said the US oil rig count had risen by six, adding to the general bearish sentiment. Drillers have added 32 oil rigs over the past three weeks. Analysts said the negative market sentiment was likely to continue until the supply side started to react.
“It has made a big move downwards – but how much lower can you go?” Jakob said.
“We are back to the level where current prices will have a negative impact on future production.”