Oil prices dive on China data, strong dollar

The news: Oil prices have dropped to their lowest since late July, as mixed Chinese economic data and rising OPEC exports eased fears about tight markets and the US dollar strengthened.

The numbers: Brent crude futures settled at USD81.61 a barrel, down 4.2%, while US West Texas Intermediate (WTI) crude finished at USD77.37 a barrel, down 4.3%.

The context: A recovery in oil exports from the Organization of Petroleum Exporting Countries (OPEC) has added to the pressure on oil prices. The weakness was underlined after China's total exports of goods and services contracted at a quicker pace than expected, although its crude oil imports in October showed robust growth. Analysts said the data signalled a continued decline in the Chinese economic outlook, driven by deteriorating demand in exports to the West. Meanwhile, fading investor hopes for a peak in global interest rates also helped lift the US dollar from recent lows, making oil more expensive for holders of other currencies.