Oil falls more than 2% on China slowdown

Oil prices fell more than 2 percent Oct. 13 as the global economic slowdown took a toll on China.

China, the world’s second-largest oil consumer behind the United States, has been pushing up oil demand as its economy expanded. But a drop in its export growth in September showed that it’s been affected by the sluggish U.S. and European economies. Consumers are spending less and buying fewer Chinese products. If China’s exports continue to cool off, its economy will slow and its appetite for oil will diminish.

“We’re interconnected,” independent analyst Andrew Lipow said. “A slowdown in consumption in the U.S. and Europe is being felt over there.”

Benchmark crude fell $2.16, or 2.5 percent, to $83.40 per barrel in Oct. 13 afternoon trading in New York. Brent crude, used to price many international kinds of oil, lost $1.09, or at $110.27 a barrel in London.

The most recent economic data in the U.S. showed little sign of the economy picking up steam. The number of people applying for unemployment benefits fell slightly the week ending Oct. 7, but not by enough to signal job growth.

And the Energy Department said that oil and natural gas supplies grew unexpectedly the week ending Oct. 7, while refineries slowed down and gasoline supplies dropped — all signs of soft demand.

The international Energy Agency joined the OPEC in trimming its demand forecasts for this year and 2012. The Paris-based IEA said Oct. 12 it still expects world demand to hit a record this year, but more slowly than previously expected. The IEA’s outlook followed a similar one from the Organization of Petroleum Exporting Countries on Oct. 11.

—Associated Press