Oil prices continue to drop as weak economic data from China and the US followed forecasts for lower global oil demand growth for 2013 released last week by the IEA, EIA and OPEC. The weak data stoke concerns of a slowdown in economic growth in the world’s top oil consumers.
China’s economic recovery slowed in the first quarter as the annual rate of growth fell to 7.7% from 7.9% in 4Q12. Economists had forecast 8% growth. China’s economic growth of 7.8% in 2012 was the weakest since 1999. Industrial output grew 8.9% in March, less than the expected 10%.
A report this morning showed Chinese oil demand fell to a seven-month low in March. Implied oil demand was 9.7 mbd, down from 10.1 mbd in February.
A report on Friday showed US retail sales contracted in March for the second time in three months. The sales data supports the view that the US economy continues to struggle and has not gained as much momentum as analysts believed just a few weeks ago.
OPEC Gulf Arab producers said they are happy to leave production unchanged at current price levels. Saudi Arabia’s oil minister said last month that around $100/bbl was a “reasonable” price for consumers and producers.