EghtesadOnline: Oil prices dropped by more than one % on Friday as clouds gathered over the global economy after the European Central Bank (ECB) warned of continued weakness and fresh data showed Chinese exports and imports slumped last month.
With surging US supply also unsettling markets, international benchmark Brent crude futures were at $65.42 per barrel, down 88 cents, or 1.3% from their last close, Reuters reported.
US West Texas Intermediate crude futures were at $56.03 per barrel, down 63 cents, or 1.1%.
Financial markets, including crude oil futures, took a hit after ECB President Mario Draghi said on Thursday the European economy was in “a period of continued weakness and pervasive uncertainty”. Europe’s economic weakness comes as growth in Asia is also slowing down, Financial Tribune reported.
So far oil demand has held up, though, especially in China where imports of crude remain above 10 million barrels per day. Yet a slowdown in economic growth will at some point likely dent fuel demand, putting pressure prices.
China’s February dollar-denominated exports fell 21% from a year earlier, the biggest drop in three years and far worse than analysts’ expectations, while imports dropped 5.2%, official data showed on Friday.
On the supply side, crude oil has been receiving support this year from output cuts led by OPEC. Together with some non-affiliated producers like Russia, the producer group has pledged to withhold around 1.2 million bpd of supply to tighten markets and prop up prices.