Crude oil falls on global growth concerns

Crude oil 

Crude oil futures fell on Friday, as weak trade balance data from China added to concerns over the oultook for global economic growth, following Thursday's downbeat observations by the European Central Bank.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD92.97 a barrel during European morning trade, dropping 0.41%.

Official data showed earlier that China's trade surplus narrowed unexpectedly in July, dropping to USD25.1 billion from a USD31.7 billion surplus.



Analysts had expected China's trade surplus to widen to USD35.1 billion.

According to Beijing's General Administration of Customs, China’s net crude imports were 21.6 million metric tons, which is the equivalent of 5.1 million barrels a day, the least since December 2011.

Meanwhile, growth concerns also re-emerged after the ECB said in its monthly bulletin on Thursday that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.

The ECB revised down its forecast for economic growth to 0.6% in 2013, down from 1% previously and forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast of for a 0.2% contraction.

Separately, international sanctions against Iran have reportedly reduced exports from the Persian Gulf nation more than previously forecast. Analysts say there is a shortfall of 1.4 million barrels a day from Iran, which “substantially exceeds” initial estimates.

In addition, Saudi Arabia reduced production by 300,000 barrels a day last month from the highest in at least three decades, according to a report by the Organization of Petroleum Exporting Countries on Thursday.

The world’s biggest crude exporter pumped 9.8 million barrels a day in July, compared with 10.1 million in June, OPEC added.

On the London based ICE Futures Exchange, Brent oil futures for September delivery declined 0.59% to trade at USD112.56 a barrel, with the spread between the Brent and crude contracts standing at USD19.59.

(Forexpros)

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