Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. A type of fossil fuel, crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals.
Oil traded lower on Thursday morning after weak Chinese industrial data and renewed pessimism about the U.S.-China trade talks added to a rise in U.S. oil inventories to weigh on prices.
At 11:57 a.m. EDT on Thursday, WTI Crude was down 1.69 percent at US$54.13 and Brent Crude traded down 1.18 percent at US$59.53.
WTI is actually sweeter than Brent Crude and has a sulfur content of around 0.24 percent. WTI is a better grade of crude oil for the production of gasoline while Brent oil favors the production of diesel fuels. Asian countries tend to use a mixture of Brent and WTI benchmark prices to value their crude oil.
China’s Purchasing Managers’ Index (PMI) dropped in October, compared to expectations of staying unchanged from September. This increased fears that the Chinese economic growth will further weaken, especially without a U.S.-China trade deal.
Pessimism existed on Thursday after Bloomberg reported that Chinese officials are signaling doubt about the possibility the U.S. and China could reach a long-term comprehensive trade deal.
Oil demand growth could become weaker because of uncertainties around the global economy and Brexit. This could mean that the oil market will have to cope with another oversupply next year, the International Energy Agency (IEA) said earlier this week.