Markets and oil prices drop after negative Chinese data is released
by Joseph
Earnest July 27, 2015
Newscast Media NEW
YORK—World oil prices slid on Monday, hurt by poorly-received economic data
from China, the world's top energy consuming nation, traders said.
A
strong dollar and signs of increasing US oil production added further
pressure to prices, which have already been depressed by a global
oversupply of crude.
US benchmark West Texas Intermediate (WTI) for September delivery fell 64 cents to $47.50 a barrel.
Brent North Sea crude for September dropped 94 cents to stand at $53.68 a barrel in London midday deals.
"The
strengthening of the US dollar, weak manufacturing data from China and
rise in the US rig count added to the woes of a weak crude market," said
Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at
professional services organization EY.
The Chinese government on
Monday said profits of major industrial firms slipped 0.3 percent
year-on-year in June to 588.57 billion yuan.
On Friday the
preliminary reading of Caixin's Purchasing Managers' Index (PMI) -- an
independent survey of China's manufacturing activity -- came in at 48.2
for July, the weakest reading since 48.1 in April 2014.
Shanghai
shares meanwhile suffered their biggest one-day decline in more than
eight years Monday, plummeting 8.48 percent in defiance of government
efforts to prop up the market.
In a sign of drillers ramping up
production, US producers added 21 oil rigs last week, according to oil
services firm Baker Hughes.
Adding to downward pressure on prices
are expectations the US Federal Reserve will start raising interest
rates before the end of the year.
This is helping to strengthen
the greenback and making oil, which is priced in dollars, more expensive
to holders of weaker currencies.
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