Oil prices fall, China’s economic outlook weak

The official Purchasing Managers Index rose to 49.8 in September, slightly better than expected and advanced from 49.5 in August. But it remained below the 50-point mark separating expansion from contractions on a monthly basis, data from the National Bureau of Statistics showed.

Oil prices plummeted on Monday as China’s economic outlook remained weak as production data improved as a continuing trade war with the United States weighed on rising demand in the world’s largest crude importer.

Futures on futures fell 20 cents to $ 61.71 a barrel to 0632 GMT, while futures for US West Texas Intermediate crude dropped 3 cents to $ 55.88 a barrel.

Citi analysts said in a note that PMI data “remained in tight territory for 5 consecutive months, indicating that economic fundamentals were still weak.

“The government will certainly boost fiscal and monetary efforts to boost domestic demand, which we believe can help stabilize, perhaps not accelerate economic growth.”

China is the second largest consumer of oil in the world.

Saudi Arabia’s world’s top exporter has restored capacity to 11.3 million barrels per day, sources told Reuters last week, though Saudi Aramco has yet to confirm it is fully online.

Brent is set to rise 2.1% in September, its first monthly gain since June, with prices raised by an unprecedented attack on Saudi oil facilities on September 14 that cut its production by half. WTI is set to rise 1.4% this month.

Avtar Sandu, a senior freight manager at Phillip Futures in Singapore, said that “Most of this is already priced when the Saudis said they would do it quickly.”

He added that Saudi Arabia is holding on to exports using crude from inventories and free production capacity, many of which has actually been restored only in the coming weeks.

Saudi Arabia’s crown prince warned in an interview broadcast Sunday that oil prices could rise to “unimaginably high numbers” if the world does not unite to thwart Iran, but said he would prefer a political solution to it military.

This came a day after the Yemeni Houthi movement said it had carried out a major offensive near the border with the southern Saudi region of Najran and seized many troops and vehicles, but there was no immediate confirmation by the Saudi authorities./Investing.com

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