LONDON (AFP) - Brent oil prices plunged Monday to a new eight-month low near $100 per barrel, mirroring losses across financial markets, after disappointing first-quarter growth data in top global energy consumer China.
In earlier morning deals, Brent North Sea crude for delivery in May slid to $100.55 per barrel, which was the lowest level since July 13, 2012. It later stood at $101.00, down $2.11 from Friday. New York’s main contract, West Texas Intermediate (WTI) light sweet crude for May, dived to a four-month low at $88.05, before pulling back to $88.53, down $2.76 from Friday’s closing level.
“The week opened with heavy losses across the oil markets reflecting the current bearish momentum,” said senior analyst Myrto Sokou at the Sucden brokerage in London.
“The recent Chinese economic data failed to meet analysts’ expectations and added further pressure to the market that was already showing sharp losses following disappointing US economic data last week.”
She added: “The Chinese data raised renewed concerns about another possible slowdown in the Chinese demand (for) both oil and metals and hurt market sentiment.”
China’s gross domestic product (GDP) growth slowed to 7.7 percent in the first quarter of this year, the government said. The result, announced by the National Bureau of Statistics, compared with a median 8.0 percent growth forecast in a poll of 12 economists by AFP. The economy expanded 7.9 percent in the fourth quarter of last year.
The news raises questions about the strength of the world’s number two economy, which is a key driver of global growth, analysts said.
“China’s GDP that came in slightly below expectations is having a negative impact on oil prices,” Jason Hughes, head of sales trading at CMC Markets in Singapore, told AFP.
“Dealers were looking for China to add support to the market. The fresh data suggests that the Chinese economy hasn’t bottomed out... as people have thought.”
Brent oil had already plunged on Friday to an eight-month low, driven by the stronger dollar, the weak crude market outlook and following downbeat retail sales data in top crude consumer the United States.
“Poorer-than-expected data from China have fuelled new fears about demand. On Friday, the US had already published disappointing retail sales figures,” noted Commerzbank analyst Carsten Fritsch.
“In other words, demand in both of the leading oil consumer countries is currently weaker than anticipated.”
US retail sales fell 0.4 percent in March from February, Commerce Department data showed Friday, suggesting that higher taxes and government spending cuts were taking a toll on the economy.
Prices were also dampened by forecasts of lower global demand by the Organization of Petroleum Exporting Countries, the International Energy Agency and the US government’s Energy Information Administration.