Oil prices fall as Asia's leading economies slow further
SINGAPORE: Oil prices fell on Thursday as weak Japanese and Chinese economic data fuelled concerns that low levels of investment could further erode already slowing global growth.
Japan's core machinery orders fell 3.6 percent in July, official data showed, much worse than a 3.7 percent increase expected by economists, and followed a 7.9 percent month-on-month decline in June.
In Asia's biggest economy China, the producer price index fell 5.9 percent in August from the same period last year, its 42nd consecutive month of decline and the biggest drop since the depths of the global financial crisis in late 2009, data showed on Thursday.
With many economies facing headwinds, ANZ bank said global growth for 2016 and 2017 would hold around 3.5 percent, revised down from the 4 percent it had previously forecast.
ANZ added that "in the near term the risks are skewed to further downward revision."
Benchmark Brent crude oil futures fell by around 1 percent to $47.09 per barrel at 0433 GMT. U.S. crude futures were down 0.8 percent at $43.79 a barrel.
Oil prices have fallen by more than 50 percent since June 2014 as soaring output clashed with slowing economies in Asia, the main growth engine for commodities over the previous years.
The weakening in Asia's economies and commodity demand is having far-reaching effects.
On Wednesday, Standard & Poor's downgraded Brazil to a junk-grade credit rating, just seven years after it first won an investment-grade rating. Brazil, one of the main commodity exporters to China and a member of the so-called BRICS emerging economies - Brazil, Russia, India, China and South Africa - was until recently seen as one of the key drivers of the global economy.
The oil price fall was compounded after the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, decided last November to keep output high in favour of market share over prices.
"In the first half of 2015, Saudi Arabia exported on average 4.4 million barrels per day (b/d) of crude oil to seven major trading partners in Asia, making up more than half of Saudi Arabia's total crude oil exports over that period," the U.S. Energy Information Administration (EIA) said.
"Even as global crude oil prices fell in 2014 and 2015, Saudi Arabia increased production and kept its export levels high, enabling it to maintain its market share in these countries," the EIA added.