Oil prices steady, all eyes on data seen showing China GDP growth slowdown

Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang
FILE PHOTO: Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang province, China August 22, 2019. REUTERS/Stringer

October 18, 2019

By Jane Chung

SEOUL (Reuters) – Oil prices were stable on Friday ahead of data that analysts say could show China, the world’s largest oil consumer, just recorded its weakest quarter of economic growth in nearly three decades, dragged down by a trade dispute with the United States.

Global benchmark Brent crude oil futures <LCOc1> fell by 9 cents, 0.2%, to $59.82 a barrel by 0039 GMT.

U.S. West Texas Intermediate (WTI) crude <CLc1> futures were up by 4 cents, or 0.07%, to $53.97 per barrel.

Analysts polled by Reuters expected China’s gross domestic product (GDP) to grow 6.1% in the July-September quarter from a year earlier, the slowest pace since the first quarter of 1992, the earliest quarterly data on record.

The Chinese government is due to release its third-quarter GDP data at 0200 GMT, along with other indicators for September.

With all eyes on the upcoming numbers, analysts expect weaker economic readings to add to pressure on Beijing to step up stimulus measures.

“The release of fixed asset investment and industrial activity (data) in China will set the tone in commodity markets,” ANZ Bank predicted in a note.

Adding to downward pressure, U.S. crude oil stockpiles surged last week as refinery output dropped to a two-year low, while gasoline and distillate fuel inventories decreased, the Energy Information Administration said on Thursday.

U.S. crude inventories increased by 9.3 million barrels in the week ended Oct.11, compared with analysts’ expectations for an increase of 2.9 million barrels.

Elsewhere, the joint technical committee monitoring a global deal to cut output between the Organization of the Petroleum Exporting Countries (OPEC) and partners, including Russia, found compliance with cuts for September stood at 236%, according to four OPEC sources.

OPEC and its allies have agreed to limit their oil production by 1.2 million barrels per day (bpd) until March 2020.

(Reporting by Jane Chung; Editing by Kenneth Maxwell)

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