TOKYO: Oil prices slipped below $50 a barrel on Thursday after weak Japanese data sounded alarm bells over the prospects for global growth, outweighing the bullish impact of a bigger-than-expected decline in U.S. crude oil stocks.
Japan’s exports slowed for a second straight month in August in a sign China’s economic slowdown could be damaging the world’s third-biggest economy.
The data follows worrying figures from other Asian economies – including South Korea and Taiwan – which are increasing anxiety over the consequences of a sharp slowdown in China.
North Sea Brent crude oil was down 25 cents at $49.50 a barrel by 0830 GMT, after hitting an early high of $50.14. U.S. light crude oil was down 30 cents at $46.85 a barrel.
Both global benchmarks had rallied sharply over the last three days as the dollar weakened on expectations that the U.S. central bank, the Federal Reserve, would maintain interest rates at their current, very low, levels.
The Federal Reserve is due to issue a policy statement at 2 p.m. EDT (1800 GMT) on Thursday and economists now see about a one-in-four chance of a U.S. rate increase.
Higher U.S. interest rates would be likely to boost the U.S. currency, making dollar-denominated oil more expensive for importers holding other currencies.
This week’s rally has made a further sharp sell-off in oil less likely, said Robin Bieber, a technical analyst and director of London brokerage PVM Oil Associates.
