Monday, December 8, 2014 7:47 am
Crude oil hit fresh five-year-lows Monday following another weak batch of trade data out of China, while prices were also pressured by the strengthening dollar, analysts said.
US benchmark West Texas Intermediate (WTI) for January delivery was down 76 cents at $65.08 in afternoon trade. Brent crude slipped 87 cents to $68.20.
WTI is sitting at its lowest point since July 2009 and Brent is at lows not seen since October 2009, with the contract continuing to be hurt by OPEC’s decision last month to maintain output despite a global supply glut.
“Investors are casting their eye on the Chinese trade data at the moment… weakness could mean pressure on Brent,” said David Lennox, resource analyst at Fat Prophets in Sydney.
China said Monday that exports grew just 4.7 percent year-on-year to $211.66 billion in November while imports dropped 6.7 percent to $157.19 billion.
Analysts had expected exports to grow 8.0 percent and imports to expand 3.9 percent.
Falling commodity prices, including oil, which has slumped by about 40 percent since June, “will have weighed on the value of commodity imports”, research house Capital Economics said in a note.
“The sharp fall (in Chinese imports) also hints at a further cooling of domestic demand,” it said.
Trade figures out of China, the world’s top energy consumer, are closely watched for their impact on crude prices, especially the more internationally leveraged Brent contract.
The latest figures come as China struggles with weakness in its industrial and financial sectors, prompting the country’s central bank last month to cut benchmark interest rates for the first time in more than two years.
Oil prices have also been hit by a pick-up in the dollar, which surged Friday in reaction to figures showing the US economy created 321,000 jobs in November, its best monthly performance in nearly three years.
The dollar was at 121.52 yen on Monday compared with 121.44 yen in New York Friday afternoon.
A stronger greenback makes dollar-priced oil more expensive for buyers using weaker currencies, denting demand and pushing prices lower.