Oil prices
fell by more than $1 a barrel, losing over 1.5% in early trading on Monday,
after disappointing Chinese inflation data and a lack of clarity on Beijing's
economic stimulus plans stoked fears about demand.
Brent crude
futures were down $1.26, or 1.59%, at $77.78 per barrel by 0020 GMT, and U.S.
West Texas Intermediate crude futures fell $1.20, or 1.59%, to $74.36 per
barrel.
The negative
news from China outweighed market concerns over the lingering possibility an
Israeli response to Iran's Oct. 1 missile attack could disrupt oil production,
though the U.S. has cautioned Israel against targeting Iranian energy
infrastructure.
China's
deflationary pressures worsened in September, according to official data
released on Saturday, and a press conference the same day left
investors guessing about the overall size of a stimulus package to
revive the sputtering economy.
The consumer
price index rose 0.4%, the data showed, missing
expectations, and the producer price index fell at the fastest pace in six
months, down 2.8% year-on-year, according to the National Bureau of Statistics.
"Saturday's
briefing by the China Ministry of Finance has turned out to be a flop. The
fiscal measures needed to remove downside risks to growth and ignite the animal
spirits within Chinese consumers (are) conspicuous in their absence," IG
market analyst Tony Sycamore said in a note.
Beijing said
on Saturday it would ramp up debt issuance but failed to give a dollar figure.
Both oil
benchmarks had settled
up 1% on the week on Friday as investors weighed possible supply
disruptions in the Middle East and Hurricane Milton's impact on fuel demand in
Florida.
It blamed
weak refining margins due to a slowdown
The U.S. on
Friday expanded
sanctions against Iran in response to its Oct. 1 attack on Israel,
targeting its "ghost fleet" that ferries illicit oil supplies across
the globe.
In the U.S.
market, energy firms last week added
oil and natural gas rigs for the first time in four weeks, according
to a closely followed report by energy services firm Baker Hughes.
The oil and
gas rig count, an early indicator of future output, rose by one to 586 in the
week to Oct. 11.
The impact of
Hurricane Milton boosted short-term demand in the U.S. as evacuations supported
gasoline consumption, but weak demand dominated the fundamentals outlook.
Oil
major BP posted
a $600 million drop in its third-quarter profit on Friday because of weak
refining margins amid a slowdown in global oil use.