Oil Prices Decline as Global Economic Worries Mount

Investing.com – Oil prices dropped on Wednesday as weak data out of China stoked concerns over the global slowdown and waning demand, even as U.S. production hit record highs.

New York-traded fell 44 cents, or 0.97%, at $44.97 a barrel by 9:59 AM ET (14:59 GMT).

Meanwhile, , the benchmark for oil prices outside the U.S., traded down 25 cents, or 0.46%, to $53.55.

While purchasing managers’ indexes across Asia revealed a widespread manufacturing slowdown in the final month of 2018, Chinese data showed the first contraction in factory activity in 19 months.

China is the world’s largest importer of oil and the news added to concerns that a global economic slowdown could crimp demand for crude, already under pressure last year as surging production, particularly in the U.S., added to a global supply glut.

Independent market analyst Greg McKenna said in a note on Wednesday that it was “difficult for traders and investors to ignore what looks like a genuine global economic slowdown.”

WTI was down 25% in 2018, its first losing year since 2015. It also was down 41% from the four-year highs of nearly $77 a barrel hit in early October.

Brent lost 20% in 2018 and was off 39% from four-year highs of nearly $87 a barrel hit in early October.

“The omens are far from encouraging,” said Stephen Brennock of oil broker PVM, citing rising non-OPEC supply and the likelihood of further increases in oil inventories.

“The current bearish bias will therefore continue in the near term and it stands to reason that oil will struggle to break out from its current trough,” he said.

In other energy trading, slumped 0.88% to $1.3015 a gallon by 10:01 AM ET (15:01 GMT), while dropped 0.06% to $1.6784 a gallon.

Lastly, traded down 0.14% to $2.936 per million British thermal units.

— Reuters contributed to this report.

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