Oil prices fall on weak global economic data

Oil prices fall on weak global economic data

That came a day after a sell-off in world markets that followed the U.S. Treasury yield curve's first inversion since June 2007 - a development usually seen as a reliable predictor of looming recession.

"Oil demand should continue to soften", he added.

Brent crude futures LCOc1 were down 20 cents or 0.3% from the previous settlement at $58.29 a barrel by 0643 GMT. US West Texas Intermediate (WTI) crude oil was up by 4.0% to US$57.10 a barrel.

"The moves in oil were so outsized overnight, that some profit taking in Asia was logical", said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.

The price of Brent is still up almost 10% this year helped by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russian Federation, a group known as OPEC+.

"With Saudi Aramco reportedly eyeing an IPO once again, there is some support to the idea that Saudi Arabia has a heightened interest in strong crude prices and will cut its own output accordingly", Vienna-based consultancy JBC Energy said.

A Saudi official indicated this month that more steps may be coming, saying Saudi Arabia was committed to do "whatever it takes" to keep the market balanced next year.

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China reported weak data for July, which included a surprise drop in industrial output growth, which reached a 17-year low. In Germany, a slump in exports sent the economy in reverse in the second quarter and the Eurozone's GDP showed barely any growth.

USA crude supplies rose by 1.6 million barrels last week, compared with analyst expectations for a decrease of 2.7 million barrels, as refineries cut output, the EIA said.

USA oil was down 62 cents, or 1.1%, at $56.48 a barrel, having risen 4% the previous session, the most in just over a month.

U.S. crude stocks grew by 1.6 million barrels last week, beating analysts' expectations for a decrease of 2.8 million barrels as stated by the Energy Information Administration.

Also differentiating Brent from WTI is the looming OPEC report, said Bob Yawger, director of energy futures at Mizuho in NY.

There are several other positive factors, he affirmed, with the rising demand for oil during H2 2019 due to the end of the regular maintenance season for refineries around the world and the entry of many new refineries to service in Asia and the Middle East by Q4 2019.

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