US crude drops 2.1%, settling at $50.51, pressured by bearish China data

Key Points
  • Brent crude oil falls to about $59 a barrel as China reports slump in import-export data.
  • OPEC-led supply cuts provide some support.
  • Saudi energy minister says no need for early OPEC meeting.
Oil pumpjacks in silhouette at sunset.

Oil prices fell on Monday after data showed weakening imports and exports in China, the world's second-largest oil consumer, raising the prospect of a slowdown in fuel demand.

China's exports fell by the most in two years in December while imports contracted, official figures showed, pointing to further weakness in what is also the world's second-largest economy.

Monday's losses accelerated sharply heading into the settlement for major crude benchmarks.

Brent crude, the international benchmark, fell $1.48, or 2.5 percent, to $59 a barrel around 2:30 p.m. ET, trading as low as $59.37 intraday. U.S. crude ended Monday's session down $1.08, or 2.1 percent, at $50.51.

"Both imports and exports disappointed expectations and are set to revive fears about a global growth slowdown," said Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer.

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Crude gave up an earlier gain following the release on Monday of the Chinese figures, the latest to point to an economic slowdown since the second half of 2018. Asian stock markets also slipped and European equities fell in early trade.

"Oil prices are getting weighted down by the prospects of weaker economic growth in China," Stephen Innes of futures brokerage Oanda said in a report.

"This data drives home just how negative of an impact trade war is having on the Chinese and perhaps global economy."

Despite concern about the outlook, there is little sign that Chinese oil demand has weakened yet. China's crude imports in December surged nearly 30 percent from a year earlier, Reuters calculations of customs data showed.

Oil is drawing support from supply cuts led by the Organization of the Petroleum Exporting Countries and non-OPEC allies, including Russia.

The group of producers, known as OPEC+, agreed in December to cut oil output by 1.2 million barrels per day starting in January to prevent a supply glut and boost prices.

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Saudi Arabia's Energy Minister Khalid al-Falih said on Monday that he is not worried about a global slowdown hurting oil demand as of yet.

"The global economy is strong enough, I'm not too concerned. If a slowdown happens, it will be mild, shallow and short," he told reporters in Abu Dhabi.

Crude futures have rallied recently after sinking to one-and-a-half year lows reached in late December.

"There's a close proximity to $50 (for WTI)," said Bob Yawger, director of futures at Mizuho in New York. "There's a significant amount of new length in the market in crude oil and interest in keeping the market above that number."

Al-Falih said on Sunday the oil market was "on the right track" and there was no need for an extraordinary OPEC meeting before its next planned gathering in April.

— CNBC's Tom DiChristopher contributed to this report.