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Brent Crude Declines Before China Manufacturing Data; WTI Drops

Brent crude declined for the third time in four days before manufacturing data from China, the world’s second-biggest oil consumer. West Texas Intermediate fell in New York.

Futures dropped as much as 0.6 percent in London. An index of China’s factory output probably fell to 50 in September, a Bloomberg News survey showed before a preliminary reading from HSBC Holdings Plc tomorrow. That would be down from 50.2 for August. Libya was pumping 700,000 barrels a day of crude after it cut output at the Sharara field, National Oil Corp. said.

“There’s some downward momentum in the market’s outlook for the Chinese economy at the moment,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “The news has been consistently weak recently.”

Brent for November settlement slid as much as 63 cents to $97.76 a barrel on the London-based ICE Futures Europe exchange and was at $97.84 at 3:06 p.m. in Singapore. The volume of all futures traded was about 43 percent below the 100-day average. Prices have decreased 12 percent this year.

WTI for October delivery, which expires today, slid 42 cents to $91.99 a barrel in electronic trading on the New York Mercantile Exchange. The more-active November contract was 28 cents lower at $91.22. The U.S. benchmark crude was at a discount of $6.53 to Brent for the same month, compared with $6.74 on Sept. 19.

China Economy

Brent fell 0.5 percent on Sept. 15 after government data showed Chinese industrial production expanded in August at the weakest pace since the global financial crisis. Factory output in August increased the slowest since December 2008, excluding the Lunar New Year holiday period of January and February, according to National Bureau of Statistics data compiled by Bloomberg.

The HSBC gauge of manufacturing probably dropped for a second month, the median estimate in the Bloomberg survey of 19 economists showed. China will account for about 11 percent of world oil demand this year, compared with 21 percent for the U.S., the International Energy Agency forecasts.

In Libya, the Zawiya refinery remains closed after a rocket attack last week, according to Mansur Abdallah, a plant official. The connected Sharara oil field has been halted as a precaution, shutting about 30 percent of the nation’s output.

Libya is working to restore crude output after a year of unrest reduced it to the smallest producer in the Organization of Petroleum Exporting Countries.

http://www.bloomberg.com/