Oil prices slide over China demand
China's GDP grew slowest in nearly three decades
Oil prices slid on Friday on jitters over demand from China after the world's largest oil importer recorded its weakest quarter of economic growth in nearly three decades, dragged down by a trade dispute with the US.
Brent crude futures fell by 0.4 per cent to $59.70 a barrel from their previous settlement. US West Texas Intermediate (WTI) crude futures edged down 0.1 per cent to $53.89 per barrel.
"The [China] GDP print has weighed on short-term sentiment and we have seen regional stock markets and oil contracts edge lower because of that," said Jeffrey Halley, senior market analyst for Asia Pacific at New York-based Oanda, which provides currency solutions to corporate clients.
Crude demand growth tends to track economic growth trends, but Mr Halley said China's need for oil would not recede any time soon.
Underlining that view, Chinese official data released on Friday showed robust refinery throughput in September, rising 9.4 per cent from a year earlier to 56.49 million tonnes, on increases from new refineries and some independent refiners resuming operations after maintenance.
"There's a lot of demand pessimism already priced into the oil markets ... China GDP was not negative enough [below 6 per cent] to alter the positive effects for the trade talks," said Stephen Innes, Asia Pacific market strategist at AxiCorp.
US and Chinese trade negotiators are working on nailing down a phase one trade deal text for their presidents to sign next month, US Treasury Secretary Steven Mnuchin said.
Adding to the downward pressure, US crude oil stockpiles surged last week by 9.3m barrels as refinery output dropped to a two-year low, while gasoline and distillate fuel inventories decreased, the Energy Information Administration said on Thursday.
Elsewhere, the joint technical committee monitoring a global deal to cut output between the Opec and partners, including Russia, found compliance with cuts for September stood at 236 per cent, according to four Opec sources.
"Concerns about softer growth in the demand for oil and doubts about Opec's ability to rebalance the market on the current production cut rate will be key drags on prices in the near term," ANZ Research said in a note.
Opec and its allies have agreed to limit their oil production by 1.2 million barrels per day until March 2020.
Opec lowered its 2019 global oil demand growth forecast to 0.98 million bpd, while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to Opec's latest monthly report.
Updated: October 18, 2019 05:06 PM