Futures Movers: Oil prices decline after weak China data, trade worries

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Worries about the global economic backdrop were back in focus for oil traders Thursday, with crude prices declining after a round of lackluster factory data out of China, and a news report that said Chinese officials have doubts over prospects for a long-term trade deal with the U.S.

West Texas Intermediate crude CLZ19, -2.25%  for December delivery fell $1.24, or 2.3%, to $53.82 a barrel on the New York Mercantile Exchange.

Global benchmark December Brent crude BRNZ19, -0.79%  declined by 37 cents, or 0.6%, to $60.24 a barrel on ICE Futures Europe. The contract expires at the day’s settlement. January Brent crude BRNF20, -1.56%, which will become the front month, was off 77 cents, or 1.3%, at $59.47 a barrel.

In a note Thursday, Robert Yawger, director of energy at Mizuho Securities U.S.A., attributed the weakness in oil prices to “U.S./China trade pessimism.”

Chinese officials are expressing doubt about the ability to reach a comprehensive, long-term trade deal with the U.S. despite progress toward signing a “phase one” agreement, Bloomberg reported Thursday. The report said Chinese officials have concerns about President Donald Trump’s impulsive nature and fear he could even back out of the limited deal that both Beijing and Washington have signaled they want to sign in coming weeks.

China’s official gauge of factory activity, the manufacturing purchasing managers index, fell to an eight-month low of 49.3 in October from 49.8 in September, the National Bureau of Statistics said Thursday. A reading of less than 50 for the survey-based index indicates a contraction in activity. The downbeat economic worries raised concerns over a slowdown in energy demand.

Oil futures settled lower on Wednesday after the Energy Information Administration reported a larger-than-expected increase in U.S. crude inventories.

In other energy trading Thursday, November gasoline RBX19, -2.01%  fell 2.1% to $1.6295 a gallon, while November heating oil HOX19, -2.02%  was off 2.2% at $1.8715 a gallon. The November contracts expire at the settlement.

December natural gas NGZ19, -1.11%  fell by 4.3 cents, or 1.6%, at $2.648 per million British thermal units.

The EIA reported Thursday that domestic supplies of natural gas rose by 89 billion cubic feet for the week ended Oct. 25. Analysts polled by S&P Global Platts, on average, expected a build of 85 billion cubic feet.