Oil Down 3%, Erasing Thursday Gains as China Fears Grip Market

Investing.com – Yo-yo days are back in oil, with the market falling as much in a day as it rose previously, as global growth fears offset bullish energy fundamentals, if any.

After Thursday’s higher close of 2.8%, spurred by a surprise inventory drawdown at the delivery hub for U.S. crude, oil prices were down by that much on Friday as signs of slowing growth in China dampened hopes for demand.

China’s worse-than-expected retail sales saw their weakest growth in 15 years, while industrial output in the Asian giant rose the least amount in nearly three years, casting further doubt over demand from the world’s second-largest economy. The result was risk aversion across financial markets that put Wall Street’s on track to a second weekly loss.

“Trade war and recession fears are becoming part of our daily market swings,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago said.

U.S. crude was down $1.47, or 2.8%, at $51.11 per barrel by 12:08 PM ET (17:07 GMT).

U.K. , the global benchmark for crude, fell by $1.29, or 2.1%, to $60.16.

With just about two weeks to the end of 2018, WTI remains down about 15% on the year and some 32% lower from four-year highs of nearly $77 per barrel hit in early October. Brent is down about 10% on the year and nearly 32% lower from four-year highs of nearly $87 per barrel hit two months ago.

The market is also on the lookout for weekly U.S. oil rigs data due at 1:00 PM ET from oil services firm Baker Hughes.

U.S. drillers cut 10 rigs last week, the most in over two years. even as record production turned the United States into a net oil exporter for the first time in history.

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