Oil futures were driving lower in price for a second consecutive day on Tuesday, reduced by reports about the globe's second-largest economy developing at its slowest pace since 2009, according to published reports.
Trailing only the economy of the U.S. as far as size is concerned, China saw its economy grow at a pace of slightly higher than 9 percent during the third quarter, which was less than forecast for the globe's most rapidly developing economic system, according to Bloomberg.
The U.S. Energy Department is scheduled to release a report on Wednesday that is likely to reveal supplies of U.S. crude increased for a second consecutive week, a Bloomberg survey indicates.
"The correction could go further, below $100" analyst Eliane Tanner with Bank Sarasin & Cie in Zurich told Bloomberg regarding London-traded Brent crude. "We'll continue to see bouts of risk aversion until there's a solid solution to uncertainties in the EU. The slowdown in Chinese economic growth is not surprising after the monetary tightening."
The concern about China is based on the Asian nation's standing as the globe's second biggest consumer of oil and whether that indicates futures demand will follow suit and fall as well.
The second quarter saw growth in China at 9.5 percent so the third quarter's reduction is of concern, also because the 9.1 percent pace falls short of the predicted rate of 9.2 percent amid restrictions on monetary policy and the relaxation of foreign demand.
"The focus is on China, GDP was slightly lower than expected and the oil-specific numbers were very disappointing," Olivier Jakob with Petromatrix told Reuters.
At 10:44 a.m. on Tuesday, crude oil futures fell 0.6 percent, a 66 cent fall to $109.50 per barrel.
Another factor impacting the oil market is troubles in the euro zone with struggles to contain the sovereign debt crisis.
Moody's Investors Service informed France, the euro zone's second biggest economy, that its credit rating is under scrutiny for the next three months. Trailing only Germany as far as size in the euro zone, France presently registers an unblemished AAA for its credit rating.
France's banks are believed to be subject to increased risk due to exposure to the sovereign debt crisis. France is adamant about its top credit rating being safe but the nation did acknowledge development and growth are likely to fall short of the target. Reduced growth typically impacts demand for the energy commodity and its performance.
Leaders in the euro zone are inclined to approve the European Financial Stability Facility being used to guarantee segments of euro zone debt.
"I think the market overreacted last week but now because the Germans said we haven't got a solution, people are beginning to reconsider their optimism and so we are looking to see prices fall," Roy Jordan of Facts Energy Global told Reuters.
CNBC reports that some traders accepted reduced trade data from China that was released last week as an indicator regarding the less than stellar economic development data from the Asian nation's third quarter.
China also has seen a 12 percent reduction for imports of crude oil during the month of September. One trader said eyebrows are raising about the state of China's economic health.
This economic data "raises concern over the possibility that economic weakness is developing in China," analyst Tom Pawlicki with MF Global told CNBC.
The performances of crude and copper are likely to serve as a weathervane regarding the path that equities will follow, according to trader Dennis Gartman. The three commodities have been following very similar trading patterns as of late.
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