A VLCC oil tanker is seen at a crude oil terminal in Ningbo Zhoushan port, Zhejiang province, China. Picture: REUTERS/STRINGER/FILE PHOTO
A VLCC oil tanker is seen at a crude oil terminal in Ningbo Zhoushan port, Zhejiang province, China. Picture: REUTERS/STRINGER/FILE PHOTO

Singapore — Oil prices fell by almost 1% on Monday, with Brent crude slipping below $60 a barrel, after Chinese data showed weakening imports and exports in the world’s biggest trading nation and second-largest crude oil consumer.

International Brent crude oil futures were at $59.91 a barrel at 4.03am GMT, down 57c, or 0.9% from their last close.

US West Texas Intermediate (WTI) crude futures were down 47c, or 0.9%, at $51.12 a barrel.

China’s December overall exports fell by 4.4% from a year earlier, the biggest monthly drop in two years, official data showed on Monday, pointing to further weakening in the world’s second-largest economy. Imports last month also contracted, falling 7.6%, the biggest decline since July 2016.

“Crude futures were back in the red as trading began for a fresh week in Asia, in tandem with most of the region's stock markets … [as] China early Monday reported $351.76 billion trade surplus in dollar terms for 2018, the lowest since 2013,” said energy consultant Vandana Hari of Vanda Insights in a note on Monday.

The weak trade figures confirm a raft of indicators that have been pointing to an economic slowdown since the second half of 2018.

“Producer price inflation has decelerated for six consecutive months, adding to other signs of cooling industrial activity (in China) amid weakening global demand,” rating agency Moody’s said in a note.

Traders said the data pulled down crude oil futures and Asian stock markets alike, which had both posted modest gains earlier on Monday.

Economic research firm TS Lombard said oil prices were capped as “the world economy is now slowing … limiting the scope for positive surprises in oil demand and hampering inventory reduction.”

Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank, said “the deterioration seen recently in forward-looking economic data from the US to Europe and China” meant that the upside for crude oil futures was likely limited to $64 a barrel for Brent and for $55 for WTI.

Despite the weak Chinese trade data, the country’s oil imports remained sky-high in December at 10.31-million barrels a day, holding above the 10-million barrels a day mark for the second consecutive month, on stockbuilding by small independent refiners who were trying to use up annual quotas.

Amid this strong demand from the world’s biggest oil importer, oil cartel Opec and some non-Opec allies, including Russia, have been cutting supply since late 2018, providing crude prices with some support.

In the US, drillers cut four oil rigs in the week to January 11, bringing the total count down to 873 , energy services firm Baker Hughes said in a weekly report on Friday.