Global oil markets are stuck in bear territory, and it doesn’t look like that will be changing any time soon as a handful of global events conspire to keep prices down.
There was more soft trade data out of China earlier this week, as exports dropped for the fourth consecutive month in October. Imports were also down as domestic demand remains tepid in the Middle Kingdom. Both statistics point to the fact that we haven’t yet reached the bottom of China’s economic slump, and that Chinese consumers won’t be reversing the global growth story anytime soon.
This of course has a substantial impact on the demand side of the equation determining oil prices. The potential buying power of any uptick in Chinese domestic demand is being counted on heavily to generate new demand in global oil markets. But since Chinese trade data is painting a pretty bleak picture through into 2016, this demand won’t be forthcoming, and the build-up on the supply side occurring all over the world weighs more heavily on oil prices. The result is a four-day losing streak that has shaved over 8% off the price of WTI crude.