Oil prices drop with China, US in focus

GMT 12:24 2015 Monday ,28 September

Arab Today, arab today Oil prices drop with China, US in focus

US benchmark West Texas Intermediate
London - AFP

Oil prices fell Monday in the wake of further disappointing data out of China, a key consumer of commodities

US benchmark West Texas Intermediate for delivery in November dropped 89 cents to $44.81 a barrel compared with Friday's close. 

Brent North Sea crude for November slid 90 cents to stand at $47.71 a barrel around midday in London.

Profits at China's major industrial companies saw their biggest declines in four years last month, official data showed Monday, the latest sign of weakness in the world's second-largest economy.

Focus this week "is likely to remain on China... and on the US ahead of the employment report on Friday", Capital Economics said in a market commentary.

US jobs data could determine whether the Federal Reserve starts to raise interest rates this year. 

Higher borrowing costs would likely boost the dollar, making commodities such as oil more expensive for holders of rival currencies, further hitting demand.

Oil prices are under pressure also owing to the prospect of Iranian crude returning to an oversupplied global market following a landmark nuclear deal with major world powers reached in July.

Under the agreement, the West will lift crippling economic sanctions if Iran curbs its nuclear ambitions, allowing the country to increase its oil exports. Tehran has denied Western claims it is aiming to build an atomic bomb.

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