Oil falls below $50 on economic concerns

Oil falls below

Oil fell below $50 a barrel on Tuesday as concern about a potential slowdown in economic growth that would sap demand trumped supply outages in Nigeria and other exporting nations.

Trade in one of Britain’s largest property funds was suspended in a sign of financial stress following the country’s vote to leave the EU. A flurry of data from China in coming weeks is expected to show weakness in trade and investment.

Brent crude (LCOc1) was down 99 cents at $49.11 a barrel at 1039 GMT. The global benchmark is still up more than 80 percent from a 12-year low close to $27 reached in January. U.S. crude was down $1.15 at $47.84 a barrel.

“Asia has been relatively weak and China is not providing much support,” said Olivier Jakob, oil analyst at Petromatrix, who also said weak refined products were pressuring crude.

“Without the support of the products and with a structure in crude oil that is weakening, it is difficult to think that crude can break away to the upside.”

British bank Barclays said concern over the global economy was weighing.

“The deterioration in the global economic outlook, financial market uncertainty and ripple effects on key areas of oil demand growth are likely to exacerbate already-lacklustre industrial demand growth trends,” the bank said in a report.

The forthcoming Chinese data is also expected to show sluggish industrial output and another drop in foreign reserves, reinforcing views that Beijing will roll out more economic support measures.

Oil has gained support this year from signs that a supply glut that has halved oil prices in the last two years is easing and from unplanned outages from Canada to Nigeria.

The author: Michel THEYS

Michel Theys, a Belgian native, began his career as a civil servant, serving the public for several decades. After retirement, he shifted gears to follow his passion for journalism. With a background in public administration, Theys brought a unique perspective to his reporting. His insightful articles, covering a wide array of topics, swiftly gained recognition. Today, Michel Theys is a respected journalist known for his balanced and thoughtful reporting in the Belgian media landscape.

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