Oil falls as glut fears return, China data eyed

15 July 2016 10:55 (UTC+04:00)

Crude futures fell in early trading in Asia on Friday as concerns about a global oil glut returned to the fore and traders wait on data from China, which is expected to report its lowest growth rate since 2009, Reuters reported.

Brent crude futures were down 41 cents at $46.96 a barrel at 0024 GMT. On Thursday they settled up $1.11, or 2.4 percent, at $47.37 a barrel, supported by short covering.

U.S. West Texas Intermediate (WTI) was down 40 cents at $45.28 a barrel. The contract rose 93 cents, or 2.1 percent, to end at $45.68 a barrel in the previous session.

China is expected to post its weakest quarterly economic growth since the global financial crisis on Friday, raising pressure on policymakers to take more steps to bolster demand.

The data is due at 0200 GMT.

While fears of a hard landing in China have eased, investors fear a further slowdown and any major fallout from Britain's decision to leave the EU earlier this month would leave the world even more vulnerable to the risk of a global recession.

That would push demand for oil and its products down further amid indications of a persistent oversupply, which were reinforced this week by the International Energy Agency and the U.S. official energy think tank.

Both the IEA and the Energy Information Administration issued reports and data showing that an oil glut which sent prices crashing from the northern hemisphere's summer of 2014 through to early this year is not clearing as early as many had expected.

Data on Thursday from market intelligence firm Genscape showed a 171,511-barrel build at the Cushing, Oklahoma delivery hub for WTI futures during the week to July 12, traders said.


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