Crude oil prices have fallen following weak Chinese manufacturing data.
Brent slipped 13 cents and traded at $37.09 a barrel, while the US West Texas Intermediate (WTI) crude CLc1 dropped 9 cents at $36.67 per barrel, Reuters reported.
Initially oil futures were on course for recovery, but later dropped as data highlighted a fall in China’s national rail freight volumes in 2015.
San Francisco Fed President John Williams told CNBC: “It’s important, in thinking about the Chinese data, to realise that China is undergoing a pretty significant pivot in terms of slower growth… and also a pivot away from manufacturing and more towards consumer spending.”
Oil producers are not willing to reduce output, which is leading to a surplus of crude in the market adding pressure on the prices. The prices have dropped by two-thirds since mid-2014.
ANZ told the news agency that the oversupply situation will worsen in 2016 due to tensions between Saudi Arabia and Iran.
Traders are watching for storage data to be released by American Petroleum Institute.
After the US Government lifted a 40-year old ban on the country’s crude exports in December 2015, several companies are preparing to start export soon.