Oil futures declined Thursday to settle at their lowest in over a week, with U.S. prices down a fourth session in a row but holding on to a modest gain for the month.
Worries about the global economic backdrop were back in focus for oil traders, with prices declining after a round of lackluster factory data out of China, and a news report that said Chinese officials have doubts over prospects for a long-term trade deal with the U.S.
West Texas Intermediate crude CLZ19, -1.96% for December delivery fell 88 cents, or 1.6%, to settle at $54.18 a barrel on the New York Mercantile Exchange. Prices fell a fourth straight session and marked their lowest finish since Oct. 22, according to Dow Jones Market Data. For the month, prices rose 0.2%.
Global benchmark December Brent crude BRNZ19, -0.66% declined by 38 cents, or 0.6%, to end at $60.23 a barrel on ICE Futures Europe—also the lowest since Oct. 22. The contract, which expired at the day’s settlement, posted a gain of 0.9% for the month. January Brent crude BRNF20, -0.30%, which became the front month, lost 62 cents, or 1%, at $59.62 a barrel.
In a note Thursday, Robert Yawger, director of energy at Mizuho Securities U.S.A., attributed the weakness in oil prices to “U.S./China trade pessimism.”
Chinese officials are expressing doubt about the ability to reach a comprehensive, long-term trade deal with the U.S. despite progress toward signing a “phase one” agreement, Bloomberg reported Thursday. The report said Chinese officials have concerns about President Donald Trump’s impulsive nature and fear he could even back out of the limited deal that both Beijing and Washington have signaled they want to sign in coming weeks.
China’s official gauge of factory activity, the manufacturing purchasing managers index, fell to an eight-month low of 49.3 in October from 49.8 in September, the National Bureau of Statistics said Thursday. A reading of less than 50 for the survey-based index indicates a contraction in activity. The downbeat economic worries raised concerns over a slowdown in energy demand.
Oil futures settled lower on Wednesday after the Energy Information Administration reported a larger-than-expected increase in U.S. crude inventories.
In other energy trading Thursday, November gasoline RBX19, -2.36% fell 2% to $1.6312 a gallon, with front-month prices up 1.6% for the month, while November heating oil HOX19, -1.51% was off 1.9% at $1.8780 a gallon, settling with a monthly loss of nearly 1.5%. The November contracts expired at the settlement.
December natural gas NGZ19, -2.64% fell by 5.8 cents, or 2.2%, at $2.633 per million British thermal units. Prices jumped 13% for the month of October—the biggest one-month rise since November 2018.
The EIA reported Thursday that domestic supplies of natural gas rose by 89 billion cubic feet for the week ended Oct. 25. Analysts polled by S&P Global Platts, on average, expected a build of 85 billion cubic feet.