Oil Down, With China Reporting Smaller-Than-Expected GDP Growth

Oil was down on Monday morning in Asia, giving up earlier gains after China released data showing a smaller-than-expected rise in GDP during the third quarter.

Brent oil futures were down 0.37% to $42.77 by 11:51 PM ET (3:51 AM GMT) and WTI futures fell 0.41% to $40.95. Both Brent and WTI futures remained above the $40 mark, with WTI futures rolling over to the December contract on Oct. 18.

China reported 4.9% growth in GDP year-on-year for the third quarter earlier in the day, smaller than the 5.2% growth in forecasts prepared by Investing.com. However, other indicators showed a strong recovery overall for the world’s second largest economy. Industrial production grew 6.9% year-on-year and retail sales grew 3.3% year-on-year in September. The unemployment rate was 5.4%, down from the previous quarter’s rate of 5.6%.

Investors had hoped that positive data from China, a top oil importer, would be indicative of recovery and outweigh ongoing concerns over fuel demand as the number of global COVID-19 cases continues to increase, as well as increasing supply. Chinese oil purchases are expected to slow down during the current quarter as the country continues to fight a COVID-19 outbreak in the city of Qingdao, and as independent refiners face high inventories as well as limited import quotas.

Adding to the black liquid’s woes was the bleak outlook for the oil market presented by OPEC+ during the previous week’s discussions.

The body’s Joint Technical Committee reportedly warned that a prolonged second wave of COVID-19 cases in Europe and a jump in Libyan output could lead to oversupply in 2021, in the worst-case scenario. The gloomy outlook could see changes to OPEC+’s plans to ease output cuts, which would see 2 million barrels per day added to the market in 2021.

Meanwhile, U.S. House of Representatives Speaker Nancy Pelosi set a Tuesday deadline for Congress to pass the latest stimulus measures ahead of the Nov. 3 presidential elections, around two weeks away. President Donald Trump also renewed his offer to increase the measures’ price tag.