Oil prices were subdued in Asia after Chinese exports saw their heaviest fall in nearly seven years, stoking further worries about the world economy and a supply glut.
China’s exports tanked by more than a quarter in February — the sharpest fall since May 2009 during the financial crisis — fuelling fears that the world’s second-biggest economy and top energy consumer was in for a “hard landing”.
At around 0340 GMT, the US benchmark West Texas Intermediate (WTI) for delivery in April was up two cents at $36.52 and Brent crude for May fell three cents to $39.62.
China’s February exports decline 25.4%; imports down nearly 14%
“It’s a signal of the slowing down of the Chinese economy, the largest consumer of energy in the world,” said Margaret Yang, market analyst at CMC Markets in Singapore.
China is the world’s biggest trader in goods and a key driver for world economic growth, but its companies have been battered by weak demand from major markets. In turn, its slowing expansion has helped send commodities prices plunging.
UBS predicts $55 but Moody’s says oil prices may drop to $25 per barrel
Traders are also waiting for the release on Wednesday of the US commercial crude inventories for the week ending March 4, seeking clues about demand.
The US inventories remain brimming “but demand has yet to catch up so essentially, the fundamentals are still quite weak”, Yang told AFP.
Eyes will also be on production data. Easing the US output and talks of a possible production freeze by major producers led by Russia and Saudi Arabia helped push prices higher over the past three weeks on hopes the supply glut would ease.
But some analysts have cautioned against being too optimistic an overall agreement to freeze output would be met.