LONDON: Brent crude fell to a four-year low below $79 a barrel Thursday after Chinese data showed further economic slowdown, Saudi Arabia kept silent about a possible cut in production and crude stocks built up at a key U.S. delivery point.
China’s economy lost momentum in October, with factory growth dipping and investment growth hitting a near 13-year low, reinforcing expectations of a slower increase in fuel demand.
Developing economies had been a major support for oil over the past decade, but demand is now failing to keep up with increasing supply from North American shale production.
Brent crude for December was down by $1.40 at $78.98 a barrel by 1615 GMT after falling to an intraday low of $78.65, its lowest since September 2010. U.S. light crude was down $1.60 at $75.58 a barrel, its lowest for over three years.
U.S. crude stocks fell more than expected last week as refineries hiked output, while gasoline stocks increased, data from the Energy Information Administration showed Thursday.
But crude stocks at the closely watched Cushing, Oklahoma, hub for U.S. crude oil futures rose by 1.7 million barrels.
Demand for oil from members of the Organization of Petroleum Exporting Countries will drop to 29.2 million barrels per day next year, almost 1 million bpd less than current output, the cartel forecast this week.
OPEC members meet in Vienna on Nov. 27, when they will consider how to respond to a 30 percent fall in oil prices over the past five months. Some have said they want a cut in output.
But the most powerful OPEC member, Saudi Arabia, has refrained from backing a cut, prompting speculation that it is more concerned with keeping market share than supporting prices.
“We do not set oil prices. The market sets the prices,” Saudi Oil Minister Ali al-Naimi said Wednesday.
Commerzbank oil and commodities analyst Carsten Fritsch said some traders understood his comment to mean that Saudi Arabia would let prices fall further. “That is sort of benign neglect – at least that is what the market thinks,” Fritsch said.