US Oil Prices Falls With Weak Chinese Manufacturing Data

The US oil prices continued their downward flow on Friday for the 8th consecutive week of decline following weak Chinese manufacturing data. This is the longest losing streak in past 29 years, leading to worries for global economic growth.

China is the second-biggest oil user in the world and the demand of it in domestic as well as export sectors has dwindled in August due to shrinking of its factory sector activity at fastest pace for past six-and-half months.

The supply levels are rising continuously and the US oil prices are further said to be vulnerable to falling, even below the $40 a barrel psychological mark.

Last year in October the light, sweet crude futures on the New York Mercantile Exchange traded at $40.80 a barrel. On London’s ICE Futures exchange the Brent crude was traded at $46.10 a barrel in the same month.

In late 1985 the oil prices dropped from $30 to $10 over a period of five months after output was increased by the Opec countries to regain market share after the production in non-Open countries increased.

Experts say the US oil prices may also drop below $40 a barrel, and it can even reach to $30. However, such falls would only be short term as this would lead to sharp cutback in investments.

In June it was reported the Saudi Arabian oil production levels rose further and went as high as 11 million barrels a day. This was said by Switzerland-based research group Petromatrix.

Meanwhile, the US Department of Energy said its oil stockpiles have rose to 2.6 million barrels in the week ending August 14. Policymakers have also expressed concerns about weak global economy and lagging inflation.