Oil prices fell after China’s economic data; Focus on OPEC + supply by Reuters

By Florence Tan

SINGAPORE (Reuters) – Oil prices fell on Monday after China’s weaker-than-expected third-quarter economic growth weakened, citing concerns that rising global coronavirus cases were affecting demand from the world’s largest oil importer.

The world’s second-largest economy expanded 3.% percent in the third quarter a year ago, beating analyst expectations by 5.4%, according to government figures. China’s refiners, the world’s second-largest oil consumer, slowed their processing rates in September.

Brent crude for December fell 20 cents, or 0.5%, to GM 2.3 a barrel. US West Texas Intermediate crude for November delivery was down 19 cents at .6 40.69 a barrel. The contract will expire on Tuesday.

Brent rose 0.2% last week, while WTI rose 0.7% after inventories of crude and oil products fell in the United States, the world’s top oil consumer.

Howe Lee, an economist at Overseas-Chinese Banking Corp (OCBC), said China’s data showed that growth in goods and services was soft while crude processing data was “disappointing”.

“We’re likely to see prices soften for the rest of the day,” Lee said.

China’s buying of e-purchases earlier this year is expected to slow in the fourth quarter amid huge inventories and limited import quotas for independent refiners.

OCBC’s Lee added that investors were focusing on the OPEC + Group’s Joint Ministerial Monitoring Committee (JMMC) meeting later on Monday.

OPEC + includes the Organization of Petroleum Exporting Countries and its manufacturing partners such as Russia. JMMC can determine whether it delays plans to reduce its current week’s low of 7.7 million barrels (bpd) from January to two million bpd.

“Prices are not likely to be delayed as its prices have been kept in the market,” Lee said.

The OPEC + Joint Technical Committee meeting last week reported a bleak fuel demand outlook as a long-term second wave of the Covid-19 epidemic and a surge in Libyan output could push the oil market into a surplus next year.

“OPEC + is being called upon to cancel its current plan to ease its output cuts,” ING analysts said in a note.

However, the market will have to wait until the next OPEC meeting on November 30 and December 1 for any concrete decision.

The United States, the world’s largest oil producer, added the most oil and rigs since January last week as producers returned to the well pad in the last few months, keeping crude prices around $ 40 a barrel.