Oil prices fall as investors take profits amid China economy worries

Reuters Singapore Dec 14, 2018, 09.44 AM(IST)

A general view of the drilling platform, the first out of four oil platforms to be installed at Norway's giant offshore. Photograph:( Reuters )

Story highlights

US West Texas Intermediate (WTI) crude futures were at $52.47 per barrel, down 11 cents, or 0.2 per cent, from their last settlement.

Oil prices fell on Friday as investors cashed in gains of more than 2 per cent made during the previous session on concerns demand may slump amid slowing economic growth, though there are still expectations for producer supply cuts to support prices.

China, the world's second-largest economy and the largest crude importer, on Friday, reported some of the slowest retail sales and industrial output growth in years for November, highlighting the risks of the country's trade dispute with the United States.

Oil refinery throughput in November in China fell from October, which was the second-highest month on record, suggesting an easing in Chinese oil demand, though runs were 2.9 per cent higher than a year earlier.

However, some support for prices remains because of the output cuts agreed between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers including Russia. That could create a supply deficit by the second quarter of next year, the International Energy Agency (IEA) said on Thursday.

Brent crude oil futures were at $61.09 per barrel at 0353 GMT, down 36 cents, or 0.6 per cent, from their last close.

US West Texas Intermediate (WTI) crude futures were at $52.47 per barrel, down 11 cents, or 0.2 per cent, from their last settlement.

"I think after the big moves overnight there's a little bit of self-shock among traders, volumes are well down... I don't see a great deal of follow through on last night's moves," said Michael McCarthy, chief markets strategist at CMC Markets.

International benchmark Brent crude rose 2.2 per cent on Thursday, while WTI climbed 2.8 per cent.

"After the big move yesterday, it's a little bit of consolidation that's happening," said Jonathan Barratt, chief investment officer at Probis Securities in Sydney.

For the week, however, Brent is set to drop 0.9 per cent and WTI is set to fall 0.3 per cent.

As a part of the OPEC supply-cutting deal agreed last week, its de facto leader Saudi Arabia plans to reduce its output to 10.2 million barrels per day (bpd) in January.

In China, refineries processed 50.46 million tonnes of crude oil last month, or 12.28 million bpd, up 2.9 per cent from the same month last year, the National Bureau of Statistics reported.

However, that is down from October and from the record of 12.49 million bpd reported in September.

Still for the first 11 months of the year, refinery output gained 7.2 per cent to 554.48 million tonnes, or 12.12 million bpd, on track for an annual record.