Oil Prices Edge Lower on China Growth Concerns, but Stay Above $90
Oil prices eased in early Asian trade on Monday, but stayed above $90 a barrel, supported by tightening supplies after Saudi Arabia and Russia extended supply cuts.
Brent crude fell 49 cents, or 0.5%, to $90.16 a barrel by 0022 GMT, while U.S. West Texas Intermediate crude was at $86.77 a barrel, down 74 cents, or 0.9%.
The move was driven by concerns about the economic outlook in China, the world’s biggest oil importer. China’s economy grew at its slowest pace in a year in the third quarter, and there are growing signs that the slowdown is spreading to other parts of the global economy.
However, oil prices were also supported by the decision by Saudi Arabia and Russia to extend their supply cuts. The two countries, along with other major producers, have been withholding supplies in an effort to prop up prices.
The International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) are due to release their monthly reports this week. The reports are expected to show that global oil demand is growing at a slower pace than previously thought.
However, any sign of strong demand from the IEA or OPEC reports could push oil prices higher.
In the United States, producers added an oil rig last week for the first time since June. However, the total number of rigs is still down significantly from this time last year.
Overall, oil prices are likely to remain volatile in the near term, as they are being buffeted by a number of factors, including the global economic outlook, supply and demand, and the actions of OPEC and other producers.
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