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MTECHTIPS:- NYMEX crude down sharply on China trade as imports slump

MTECHTIPS:- NYMEX crude down sharply on China trade as imports slump

Crude oil prices plummeted on Tuesday in Asia as China reported disappointing export and import figures from August with incoming goods such as oil getting hit hard. In China. August exports fell 6.1%, a tad more than the 6% seen and imports slumped 14.3%, compared to an expected 8.2% drop. The trade surplus came in at $60.24 billion, better than the $48.2 billion seen. The trade surplus was the second highest on record, suggesting capital outflows in August may have been even worse than was suggested by the $93.9 billion drop in foreign exchange reserves last month. Weak imports suggest exports in the coming months aren’t likely to improve given that half of China’s foreign trade is in importing raw materials and parts from abroad for assembly before exporting them again. The August data argues for fresh policy easing, with the yuan exchange rate now in play following the devaluation on the 11th of that month. The PBOC is understood to have pushed the yuan onto the depreciation path last month because of pressure from government agencies which argued that a weaker currency was needed to restore trade competitiveness. Crude oil for delivery in October on the New York Mercantile Exchange dropped 3.40% to $44.49 a barrel. Overnight, Crude oil futures declined on Monday, as ongoing concerns over the health of the global economy underlined worries over a global supply glut. Trade volumes were expected to remain light on Monday, with U.S. markets closed for the Labor Day holiday.

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