NEW YORK, Oct. 14 (UPI) — Further evidence of cooling in the Chinese economy Wednesday put downward pressure on crude oil prices, struggling to make gains after last week’s rally.
Crude oil prices spiked more than 7 percent last week in a partial response to Russian military intervention in Syria. The gains were all but erased as the third week in October started with a series of reports suggesting markets were still favoring the supply side.
A series of crashes on the Chinese stock market and weak economic data weighed heavily on crude oil prices in late summer. Data published Wednesday from the Chinese National Bureau of Statistics show the consumer price index for September edged up only 0.1 percent. The producer price index contracted for the 43rd straight month.
Brent crude oil moved further away from the psychological threshold of $50 per barrel, moving about seven tenths of a percent beneath the previous close to $48.89 per barrel in early Wednesday trading. West Texas Intermediate, the U.S. benchmark for the price of crude oil, lost 1.1 percent to start trading at $46.14 per barrel.
The International Energy Agency warned in a monthly market report, published Tuesday, the global crude oil market would remain oversupplied because the potential increase from Iran would likely offset the expected slowdown in U.S. shale basins.
For the United States, Federal Reserve Gov. Lael Brainard warned inflation has been “stubbornly low” and running persistently below its 2 percent target.
“The personal consumption expenditures price index increased only 0.3 percent over the 12 months ending in August,” she said. “Much of the weakness in this index can be explained by the drop in oil and energy prices over the past year.”
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