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Oil Edges Higher as Libyan Disruption Counters Weak Chinese Data

Bloomberg |
Sep 16, 2024 07:35 PM IST

Oil rose following its first weekly gain in a month as traders weighed a drop in Libyan exports against signs that an economic slowdown in China is deepening.

Oil rose following its first weekly gain in a month as traders weighed a drop in Libyan exports against signs that an economic slowdown in China is deepening.

Oil Edges Higher as Libyan Disruption Counters Weak Chinese Data
Oil Edges Higher as Libyan Disruption Counters Weak Chinese Data

Brent futures traded near $72 a barrel, while West Texas Intermediate was above $69. Libyan exports have declined markedly as United Nations-led talks failed to break an impasse over control of the central bank, which has spilled over into its oil industry.

Chinese data over the weekend showed industrial output in the longest slowing streak since 2021 and investment falling more than expected, with the official economic growth goal of 5% for this year looking increasingly out of reach. The worsening situation in the No. 1 crude importer — along with an increase in global supply — have pushed Brent down by about 17% this quarter to near the lowest since late 2021.

Those moves have come against the backdrop of record negative positioning. With speculator positions in Brent turning net-short for the first time, trend-following funds are near their most bearish levels in the oil market, according to EA Quant Analytics, a sign that one source of selling pressure may now abate. 

“Ongoing supply losses from Libya and improved OPEC compliance from Russia should keep global oil markets in a small counter-seasonal deficit,” in the fourth quarter, Citigroup Inc. analysts including Max Layton said in a note. “Yet we still see a shift as the market starts to price 2025,” with a surplus expected, they added.

The market is also tracking Typhoon Bebinca, which made landfall near Shanghai. It’s the strongest storm to hit China’s financial capital and major shipping hub since 1949. Financial markets in the country are closed on Monday and Tuesday for a national holiday.

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This article was generated from an automated news agency feed without modifications to text.

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