Oil costs dropped on Friday after China, the world’s biggest oil importer, recorded its weakest quarter of economic progress in nearly three decades, dragged down by a trade dispute with the U.S.
Global benchmark Brent crude oil futures plunged by 34 cents, 0.6%, to $59.57 a barrel by 0350 GMT.
U.S. West Texas Intermediate crude futures had been down by 12 cents, i.e., 0.2%, to $53.81 per barrel.
In the third quarter, China’s economic progress slowed to 6% year-on-year, its weakest tempo in27-1/2 years and under expectations, dogged by soft factory production amid ongoing trade spats with the United States and sluggish domestic demand.
The slowing economic growth outmoded China’s record refinery throughput in the minds of investors, as analysts anticipate there is little the world’s second-largest oil consumer can do to spur its economy.
Refinery throughput in September surged 9.4% from a year earlier to 56.49 million tonnes, on increases from new refineries, and as some independent refiners continued operations after maintenance.
Though China’s third-quarter GDP growth was slightly below expectations, Michael McCarthy, chief market strategist at CMC Markets in Sydney, said it was not “a shock to merchants, and oil trading volumes are low,” because the weak data had been anticipated.
Adding to the downward stress, U.S. crude oil stockpiles surged last week as refinery output fell to a two-year low, while gasoline and distillate fuel inventories decreased.