The crude oil contract for November delivery dropped $1.88/bbl on the New York market Sept. 23 on reports of sluggish manufacturing statistics from China, a major oil consumer, and analysts said those reports contributed to volatility across commodity markets.
On Sept. 23, a preliminary Caixin/Markit manufacturing purchasing managers’ index for China fell to 47, which was the lowest since March 2009. Earlier this year, China’s surprise devaluation of its currency brought the Asian giant’s economy to the immediate attention of investors worldwide.
China President Xi Jinping has attempted to reassure US investors this week. He discussed his nation’s growing openness to foreign investments during stops in Seattle and Washington, DC, where he met with business leaders and government officials.
Jorg Kramer, Commerzbank chief economist, said, “There is substantial concern at present that global demand weakness is dampening the economy in the industrial countries.”
Markit said its preliminary US manufacturing purchasing managers’ index for September was 53, which was the same number as August. That is the lowest US figure since October 2013.
Howard Archer of IHS Global Insight told Reuters, “There is the very real risk that slowing growth in emerging markets like China not only hits Eurozone exports but also has a negative impact on business sentiment and leads to a scaling back of investment and employment plans.”
The October crude oil contract on the New York Mercantile Exchange dropped $1.88 to $44.48/bbl on Sept. 23 while the November crude oil contract was down $1.82 to $45.10/bbl.
The natural gas contract for October edged down by a fraction of a penny to remain at a rounded $2.57/MMbtu. The Henry Hub, La., gas price also held steady at $2.59/MMbtu.
Heating oil for October delivery dropped 2.6¢ to a rounded $1.51/gal. The price for reformulated gasoline stock for oxygenates blending for October was down a rounded 3.5¢ to a rounded $1.38/gal.
The November ICE contract for Brent crude decreased $1.33 to $47.75/bbl, and the December contract dropped $1.39 to $48.48/bbl. The ICE gas oil contract was unavailable.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was unavailable because the OPEC Secretariat office was closed Sept. 24.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.