15 April 2013, News Wires – Brent and US crude futures fell more than $1 on Monday, with the former slipping towards $101 a barrel, after Chinese and US data stoked investors’ concerns of a slowdown in economic growth in the world’s top oil consumers.
China’s economic recovery unexpectedly stumbled in the first three months of 2013 as the annual rate of growth eased back to 7.7% from the 7.9% pace set in the final quarter of last year, official data showed on Monday.
US retail sales contracted in March for the second time in three months, a sign the top oil-consuming economy may have stumbled at the end of the first quarter and supporting the view that the US economy has not gained as much momentum as analysts believed just a few weeks ago.
“The China data is going to have a major impact on an already weak commodity market,” said Jonathan Barratt, chief executive of commodity research firm BarrattBulletin.
“Generally the trend for commodities remain weak at the moment given that China is not performing the way we’ve always wanted it to perform, which suggests (prices are) coming under pressure.”
Brent crude futures dropped more than $1 to a session low of $101.46 early on Monday. Brent hit a nine-month low of $101.09 on Friday as a broad sell-off in commodities triggered a fall of as much as $3 a barrel.
US crude futures lost more than $1 to hit its lowest in six weeks at $89.40.
The weaker-than-expected Chinese data will weigh on equity markets, industrial metals and oil on Monday, Jason Schenker, president of Prestige Economics wrote in a note.
“We continue to have modest expectations for Chinese GDP growth acceleration this year, and we remain modestly more optimistic about Chinese growth in the second half of 2013 and in 2014,” he wrote.
Friday’s weak US retail sales data followed forecasts for lower global oil demand growth for 2013 released last week by the International Energy Agency, the US Energy Information Administration and the Organization of the Petroleum Exporting Countries.
The World Bank on Monday also scaled back its 2013 growth forecasts for developing East Asia and warned about possible over-heating in the region’s larger economies that could stoke inflation and asset bubbles, exacerbating investor concerns over oil demand.
The global lender, in its latest East Asia and Pacific Update, cut its GDP growth projection for China by 0.1 percentage point to 8.3% for 2013, citing Beijing’s ongoing efforts to restructure its economy.