Oil fell by almost 3% on supply growth and Chinese economy slowdown

Oil prices fell 3 percent on Tuesday over concerns the world’s stumbling economy could pinch fuel demand as U.S. crude output climbs to new heights and cuts by Saudi Arabia and its allies are smaller than advertised. Gloomy new global growth forecasts by the International Monetary Fund and signs of a spreading slowdown in China weighed on crude prices as traders worried about supplies rising in 2019 despite lower prices.

Brent oil futures LCOc1 were down $1.82, or 2.9 percent, at $60.92 a barrel by 1:45 p.m. EST (1845 GMT). U.S. West Texas Intermediate (WTI) crude futures CLc1 fell $1.57, or 2.9 percent, to $52.23. Data from Saudi Arabia on Monday showed its crude exports in November rose to 8.2 million barrels per day from 7.7 million bpd in October, as production climbed to 11.1 million bpd. U.S. government data last week showed the nation’s crude production reached a record 11.9 million bpd.

Market concerns over the depth of production cuts by the Organization of Petroleum Exporting Countries and its allies, including Russia, were also driving prices lower on Tuesday, analysts said. Russia’s Energy Minister Alexander Novak will not fly to Switzerland to attend the Davos world economic forum due to changes in his schedule, an energy ministry spokeswoman said. The International Monetary Fund on Monday warned the risk of a pronounced global slowdown has risen because of constrained international trade, and it trimmed its 2019 global growth forecast to 3.5 percent, from 3.7 percent in last October’s outlook.

Oil drops nearly 3 percent on rising supplies, China slowdown, Reuters, Jan 22