China Slowdown and OPEC Combine for Below $80 Oil

Oil fell below $80 a barrel for the first time since 2010 on Thursday, as more evidence of a slowdown in China’s resource-hungry economy chimed with OPEC warning of a substantial drop in demand next year.

Data from Beijing showed below-forecast factory output and investment growth hitting a near 13-year low, reinforcing signs that the world’s second-biggest economy will see its weakest growth for almost 24 years this year.

Stock markets .MIWD00000PUS, however, were not put off, wagering that the lacklustre figures could encourage more support measures from the Chinese authorities in the coming months, and that the slide in oil could aid growth globally.

European shares .FTEU3 rose 0.5 percent in a small rebound from falls on Wednesday. Futures markets pointed to a positive start for Wall Street ESc1 1YMc1 NDc1 later too after Asian .MIAPJ0000PUS and emerging market stocks .MSCIEF had edged up overnight.

But it was oil LCOc1 that remained the focus as it sat slumped at $79.60 a barrel, the first time since the end of September 2010 it had dropped under $80.

About Alfonso Esparza

Senior Currency Analyst, Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto. Follow on Twitterand on his Google+ profile.

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