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Oil prices slide. Economic outlook darkens
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Loading...Oil prices dropped on Friday as the perspectives for the global economy get worse after the European Central Bank (ECB) warned yesterday of continued weakness and the data shows Chinese exports and imports decreased last month.
The surging U.S. supply is unsettling markets and because of that international benchmark Brent crude futures were down with 52 cents (0.8 percent) from their last close at $65.78 per barrel.
U.S. West Texas Intermediate (WTI) futures were at $56.25 per barrel, down 0.7 percent (41 cents).
Financial markets, including crude oil futures, declined after ECB President Mario Draghi said earlier that the economy is in “a period of continued weakness and pervasive uncertainty”. Europe’s economic weakness comes as growth in Asia is also slowing down.
So far oil demand has is being consistent, especially in China where imports of crude oil remain above 10 million barrels per day.
Yet a slowdown in economic growth will at some have a negative impact on fuel demand, putting pressure prices.
China’s exports for February fell 21 percent from the same time last year, being worse than the expectations of analysis, while imports dropped 5.2 percent, shows the data.
When it comes to the supply, prices have receive support this year from output cuts by OPEC. The producer group has tried to withhold around 1.2 million barrels per day of supply to tighten markets and prop up prices.
But these efforts are being undermined by soaring U.S. crude oil production, which has increased by more than 2 million bpd since early 2018, to an unprecedented 12.1 million bpd. That makes America the world’s biggest oil producer, ahead of Russia and Saudi Arabia.
Source: Reuters
Image: Pixabay
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