Oil prices edge lower on weak Chinese data

NEW YORK, Sept. 14 (UPI) -- Weak Chinese factory output and an increase in crude oil production from Saudi Arabia weighed down crude oil prices in early Monday trading.

West Texas Intermediate, the U.S. benchmark price for crude oil, was off by a fraction of a percent from the previous close to trade at $44.47 per barrel before the start of trading in New York. Brent crude oil lost 1.1 percent from the previous session to fall to $47.59 per barrel.

A string of bad economic news from China has put downward pressure on crude oil prices, pushing Brent down nearly 4 percent from Sept. 1.

China's benchmark Shanghai Composite Index closed down 2.67 percent Monday after a weekend report showed industrial output grew by 6.1 percent year-on-year in August, up from the flat 6 percent for July but lower than what the official Xinhua News Agency said was expected by Chinese financial analysts.

Beijing devalued the nation's currency and cut interests rates in an effort to slow the economic contraction. A research note from China International Capital Corp. Ltd., the country's largest investment bank, said at least one more interest rate cut is expected this year.

The Organization of Petroleum Exporting Countries said in its September market report Chinese economic growth expectations were revised downward by 0.1 percent to 6.8 percent in 2015 and 6.4 percent in 2016. OPEC said this could spill over into the European economy.

"This is also applicable to Japan, which has close trading ties with China, and which has led to a downward revision of Japan's 2015 gross domestic product growth from 1.2 percent previously, to now stand at 0.8 percent," OPEC said.

Weak economic momentum and high supplies are keeping crude oil prices lower. Nevertheless, OPEC said demand for oil should improve next year.

"Saudi Arabia is projected to be the oil demand growth driver with transportation fuels, petrochemical feedstocks as well as crude oil for direct use projected to contribute to product growth," it said.

Saudi crude oil production of 10.3 million barrels per day for August was 7 percent higher than the full-year 2014 average.