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Oil futures struggle amid fresh China growth concerns

Published 14/10/2015, 07:45 pm
© Reuters.  Crude oil futures dip on China growth concerns, oversupply
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Investing.com - Crude oil futures struggled on Wednesday, after disappointing economic data from China added to worries about its ability to meet its year-end growth target.

On the ICE Futures Exchange in London, Brent oil for December delivery inched down 8 cents, or 0.16%, to trade at $49.61 a barrel during European morning hours. A day earlier, Brent futures lost 56 cents, or 1.11% following the release of bearish supply estimates from the International Energy Agency.

Government data released earlier showed that Chinese producer prices fell 5.9% in September, the 43rd straight monthly decline and matching the worst reading since October 2009.

Consumer prices rose 1.6% last month, below expectations for 1.8% and down from 2.0% in August.

The soft inflation data came one day after a government report revealed that China's imports shrank far more than expected in September, falling for the 11th straight month.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Elsewhere, crude oil for delivery in November on the New York Mercantile Exchange dipped 2 cents, or 0.04%, to trade at $46.64 a barrel. On Tuesday, Nymex oil prices shed 44 cents, or 0.93%.

Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.

The American Petroleum Institute will release its inventories report later in the day, while Thursday’s government report could show crude stockpiles rose by 2.8 million barrels in the week ended October 9.

The reports come out one day later than usual due to Monday's Columbus Day holiday in the U.S.

The oil market has been volatile in recent months amid uncertainty about how quickly the global glut of crude is set to shrink.

Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.

Saudi Arabia and other Gulf OPEC members have indicated they will continue to stick to their policy of defending market share by keeping production high.

Oil prices have lost nearly 60% since last summer as lingering concerns over a glut in world markets drove down prices.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $2.97 a barrel, compared to $3.03 by close of trade on Tuesday.

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