Brent crude dropped towards $82 a barrel on Wednesday, stretching losses into a fifth session, as weak economic data from top energy consumer China stoked worries about demand in a market that is already battling a deepening global supply glut, Reuters said in a report.
Services sector growth in China weakened in October as new business cooled, a private survey showed, coming just days after previous data revealed sluggish factory growth in the world's second largest economy.
"We had expected this," said Avtar Sandu, senior manager for commodities at Phillip Futures of the Chinese data. "The market is already soft for Brent and the Chinese data is not going to help although the numbers are not a surprise."
Brent fell 43 cents to $82.39 a barrel on Wednesday.
US crude slipped 17 cents to $77.02, coming off a low of $75.84 hit in the previous session - its weakest since October 2011 - after data showed crude stocks unexpectedly fell last week as refineries boosted output.
US crude stocks fell 639,000 barrels to 374.9 million in the week to October 31, compared with analysts' expectations for a increase of 2.2 million barrels, data from industry group the American Petroleum Institute showed on Tuesday.
The market is now waiting for weekly inventory data from the US Department of Energy's Energy Information Administration (EIA) later in the day for more clues on demand in the world's top oil consumer.
Oil prices on both sides of the Atlantic lost more than 2 percent overnight after Saudi Arabia cut export prices to the US threatening to deepen a global supply glut that has driven prices down 30 percent since June.
A bleak outlook for Europe after the European Commission downgraded its forecast for euro zone economic growth over the next few years also weighed on oil prices.
Saudi Oil Minister Ali Al-Naimi is making his first visits in years to fellow exporters Venezuela and Mexico, although tumbling oil prices are not the stated purpose of the trip, according to officials and sources.
Still, the travel plans come at a pivotal moment for Saudi Arabia and the OPEC, which meets later in November to discuss how to respond to the rout in global oil prices.
OPEC Downfall
OPEC members’ average crude price fell below $80 for the first time in four years as Saudi Arabia and other members of the group supplying 40 percent of the world’s oil maintained output amid slowing demand growth.
The OPEC basket, the best measure of what the oil exporters earn per barrel, fell to $78.67, OPEC announced. That’s the lowest since October 22, 2010, according to data compiled by Bloomberg. US oil production rose to the highest in at least 31 years amid slowing global demand, helping drive crude into a bear market last month.
The largest producers in the Organization of Petroleum Exporting Countries reduced prices rather than cut output, with Middle Eastern suppliers offering the biggest discounts to buyers in Asia this month since at least 2009. The group will meet in Vienna on Nov. 27 to discuss whether to cut output to support prices.
