Oil fell for a second day in New York after China said its economy grew at the slowest pace in two years and US crude stockpiles were forecast to increase.
Futures dropped as much as one per cent, extending Monday's 0.5 per cent decline, after China's statistics bureau said the economy grew at 9.1 per cent in the third quarter, less than predicted. An Energy Department report today may show US crude inventories climbed for a second week, according to a Bloomberg News survey. Technical indicators indicate prices may have advanced too fast to be sustainable.
"The correction could go further, below $100 (Dh367) for London-traded Brent crude," said Eliane Tanner, an analyst at Bank Sarasin & Cie AG in Zurich, who correctly predicted prices would drop in the second half. "We'll continue to see bouts of risk aversion until there's a solid solution to uncertainties in the EU. The slowdown in Chinese economic growth is not surprising after the monetary tightening."
Crude for November delivery fell as much as 83 cents to $85.55 (Dh314) a barrel in electronic trading on the New York Mercantile Exchange. Crude is extending losses in New York as the five-day stochastic oscillators have risen above 70, signalling prices may have climbed too quickly to be sustained, according to data compiled by Bloomberg.
China's gross domestic product increased less than the median estimate of 9.3 per cent in a Bloomberg News survey of 22 economists.
"The number from China is getting a bit worse than before," said Ken Hasegawa, an energy trading manager at broker Newedge Group in Tokyo. "If the recovery of the economies in Europe and the US is getting worse, then the economies of China and Asia will show some damage."
Libya's largest oil refinery at Ras Lanuf will be ready to start operations next month, acting CEO Abdo A. Ahmad at Libyan Emirates Refining Co said Monday