Oil prices dip on weak demand outlook, supply concerns

[SINGAPORE] Oil prices eased on Monday amid persistent concerns about the global economic outlook and the impact on oil demand, while Russia again missed its target to cut oil output last month.

Global benchmark Brent crude oil futures fell by 10 cents, or 0.2 per cent, to US$59.32 a barrel by 0108 GMT.

US crude oil futures were down by 9 cents, or 0.2 per cent, to US$53.69.

"Commodity markets continue to struggle amid weak economic data," said ANX Bank in a note.

China's economic growth slowed to 6% year-on-year in the third quarter, its weakest in 27-1/2 years and short of expectations due to soft factory production and continuing trade tensions.

Still, a 9.4 per cent year on year increase in China's refinery throughput for September signalled that petroleum demand from the world's biggest oil importer remained robust.

On the supply side, Russia said on Sunday it produced more oil in September than envisaged by a global deal due to an increase in gas condensate output as the country prepared for winter.

The Organization of the Petroleum Exporting Countries (Opec), Russia and other oil producers, an alliance known as Opec+, agreed in December to reduce supply by 1.2 million barrels per day (bpd) from the start of this year.

But several countries, including Opec kingpin Saudi Arabia, have complained about Russia's failure to comply with the deal in full.

Talks between Opec members Kuwait and Saudi Arabia to restart oil production from jointly-operated fields in the 500,000 bpd Neutral Zone added to concerns of rising supplies.

Kuwait's deputy foreign minister on Saturday said negotiations were "very positive" after Kuwaiti media, citing unidentified sources, said the two Gulf oil producers had agreed to resume crude output from oilfields in the Saudi-Kuwaiti divided zone.

"Those extra barrels will come to market at a most unwelcome time," said Stephen Innes, market strategist at AxiTrader referring to crude oil production from the Neutral Zone.

REUTERS