Oil prices fall on China demand, supply outlook

Oil prices fell yesterday on concerns of weaker demand from China after the world’s top energy consumer devalued its currency and as Organisation of the Petroleum Exporting Countries (OPEC) signalled supplies from rivals were proving more resilient than expected to low prices.

OPEC raised its forecast of 2015 oil supplies from non-member countries by 90,000 barrels per day, a sign that oil’s price collapse is taking longer to hit North American shale and other competing sources than previously thought.

In a monthly report, the organisation said it expected no extra demand for its crude oil this year despite faster global growth in consumption. China’s central bank made a “one-off depreciation” of nearly 2 per cent in the yuan after a run of poor economic data, guiding the currency to its lowest point in almost three years.

Front-month Brent futures were down $1.05 at $49.36 a barrel, erasing most of the gains made in oil’s biggest daily rally since late May the previous session. US crude fell $1.31 to $43.65 a barrel.