Oil down nearly 3 percent on Wall Street, China; Cushing draw limits loss
NEW YORK - Oil prices fell nearly 3 percent on Monday, pressured by tumbling equities on Wall Street and weak Chinese economic data, although an estimated drawdown in crude stocks at the key U.S. storage hub appeared to limit losses, traders said.
Gyrations in U.S. equity prices <.dji> and the dollar <.dxy> from bets on the timing of the first U.S. rate hike in nearly a decade have fed volatility in oil prices, which have swung up to 8 percent a day over the past month.
Wall Street's S&P 500 index <.spx> was down 2.2 percent after hitting a one-month low on bullish U.S. consumer spending data in August and bets of a rate hike by October.
"Oil is on the back foot as risk aversion is on the rise once more," said Matt Smith, director of commodity research at ClipperData, an energy markets database and consultancy in New York. "There is a distinct air of doom and gloom around."
The U.S. crude benchmark
Heavy oil oversupply and eroding demand for energy in No. 2 economy China and other Asian and emerging markets have halved crude prices over the last year.
In China, also the world's largest commodities consumer, industrial companies' profits fell at their fastest rate in four years, sparking fresh worries about manufacturing activity reports due later this week.
Offsetting some of that bearish sentiment was data from market intelligence firm Genscape estimating a drawdown of over 1 million barrels last week from the Cushing, Oklahoma delivery hub for U.S. crude, traders who saw the figures said.
Genscape's Cushing stockpile estimates are a precursor to official inventory data on U.S. crude due each Wednesday from the U.S. Energy Information Administration (EIA). Genscape had estimated draws of around 2 million barrels in each of the past two weeks.