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Oil prices continue the downward trend (Brent: $48.2)

The fear of slowing demand continues to weigh on prices this morning with lacklustre Japanese GDP and continued negative Chinese imports/exports data. Later this week, the Chinese inflation data will be followed closely for hints of growth/less growth in the huge oil-consuming country.

North Sea crude output is expected to reach a 2-year high in October according to loading schedules - i.e. around 2.065 mio. barrels per day (versus 2.007 mio. bpd expected in September). The International Energy Agency expects North Sea production to increase to around 3 mio. barrels per day this year.

Data this morning showed China's crude oil imports in August fell 13.4% compared to July; 6.26 mio. barrels per day, which is still 5.6% more than August last year. China has used the low oil prices to fill its strategic reserves which are estimated to contain around 109 mio. barrels (versus 65 mio. barrels a year ago). Oil prices have halved since same time last year.

Due to yesterday's holiday in the U.S., the weekly oil inventory reports are one day delayed; i.e. the API data will be released tomorrow and EIA on Thursday.