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Global oil futures lost more than a dollar on Monday after Saudi Arabia and Kuwait signalled ample supplies and their willingness to bear lower prices to defend market share, although better than expected trade data from China pared oil's losses.
China's export and import growth unexpectedly trumped forecasts in September, while the world's largest energy consumer increased crude oil imports by 9.5 per cent from a month ago, data showed on Monday.
"That's very good news for oil prices," Rikio Ishikura, a commodity broker at Newedge Japan said, but he was cautious about whether China has really embarked on a recovery track as the global economic outlook remained gloomy.
Brent crude oil briefly touched its lowest since December 2010 at $87.74 in early trade, but pared losses after the China data to trade at $89.04 a barrel by 0323 GMT, down $1.17. US crude fell $1.13 at $84.69, after slipping to a low of $84.25 on Monday, near July 2012 levels.
Contrary to market expectations, OPEC producers Saudi Arabia and Kuwait look set to keep output steady, and their willingness to bear with lower crude prices sparked another round of sell-off in oil on Monday.
Some stop-loss selling may have been triggered, leading to the sharp falls in prices earlier on Monday, Newedge's Ishikura said.
The world's top oil exporter Saudi Arabia has privately told oil markets that it is ready to accept oil prices perhaps down to $80 a barrel, probably to fend off competition as rival producers expand.
Kuwait's oil minister Ali al-Omair was quoted as saying by state news agency KUNA on Sunday that OPEC is unlikely to cut oil production in an effort to prop up prices because such a move would not necessarily be effective.
Omair said $76-$77 a barrel might be the level that would end the oil price slide, since that was the cost of oil production in the United States and Russia.
Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna on Nov. 27 to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015.
Some OPEC members are clamouring for urgent production cuts to push global oil prices back up above $100 a barrel.
Saudi Arabia reported September production of 9.704 million barrels per day (bpd), up from 9.597 million in August, according to a monthly OPEC report issued on Friday.
The lack of a Saudi cut could add to perceptions of traders and analysts that the kingdom is looking to defend market share, not prices.
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