(London) Oil prices widened their losses on Tuesday, pulled down by an indicator on Chinese exports which does not encourage investors to be optimistic about the growth of the country, the largest importer of crude oil in the world.
Around 11 a.m., a barrel of Brent from the North Sea for delivery in January lost 3.06% to 82.58 dollars, shortly after touching 82.51 dollars, its lowest since August.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in December, lost 3.16% to 78.27 dollars, after reaching 78.22 dollars, its first dip below the threshold of 80 dollars also since the end of August .
The fall in China’s exports accelerated in October, falling 6.4% year-on-year, according to figures released by the country’s customs office on Tuesday, a figure that does not inspire optimism for its economic growth.
“Chinese exports […] are a good indicator of global economic health,” says Swissquote analyst Ipek Ozkardeskaya. These gloomy economic data worry the market about demand from China, the world’s largest oil importer.
“The data on Chinese imports of crude oil in October, published overnight by the customs authorities”, which recorded a slight increase, “did not prevent the fall in prices”, adds Carsten Fritsch, analyst at Commerzbank.
These data also remain disappointing, as crude imports are compared to a lower base last year due to health restrictions to combat COVID-19 in the country.
The two global crude benchmarks have largely lost “all the gains they had accumulated” since the Hamas attack on Israel in early October, notes Mr. Fritsch.
Oil investors “will remain keenly alert to signs of a wider conflict in the region that could disrupt supplies, but it appears these fears are easing,” says Craig Erlam, an analyst at Oanda.
Israeli Prime Minister Benjamin Netanyahu rejected Monday evening a ceasefire in the war against Hamas, which entered its second month on Tuesday.
Finally, recent global economic data “confirms that economies are struggling under the pressure of high interest rates,” and “not expected to ease anytime soon,” which “may also have contributed to the reversal of gains in the oil,” says Erlam.
“The oil market’s attention has returned to the fragile demand outlook,” say DNB analysts.
However, the World Organization of Petroleum Exporting Countries (OPEC) remains “optimistic regarding demand” and the global economy, said alliance secretary general Haitham al-Ghais on Tuesday during the “Argus European Crude Conference” in London.
