China’s October industrial output declines on the month

Brent futures felt some downward pressure following dismal Chinese industrial output data from the National Bureau of Statistics (NBS).

PHOTO: An oil pump jack photographed at dusk, with the Chinese flag in the background. Getty Images

China's October industrial output increased 5.3% year-on-year, declining from a 5.4% growth recorded in September, the NBS reported.

The news has sparked concerns about China’s demand growth amid a sluggish economy, market analysts said.

Weakness in industrial output indicates weak economic health, as well as a contraction in the manufacturing sector, which includes production, inventory levels, etc. It highlights demand growth concerns, ultimately weighing down on prices of commodities like oil.

“The real gut punch, however, came from China [following the industrial output data], the world’s second-largest oil consumer,” SPI Asset Management’s managing partner Stephen Innes said.

The NBS data fell short of the anticipated 5.6% rise projected in a Reuters poll of 43 analysts.

“Crude oil prices slammed into reverse… [as] dismal demand data from China hit the brakes on bullish momentum,” Innes added.

By Aparupa Mazumder

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