China's oil demand concerns dampen upward potential of oil prices

It is probably still too early for the Brent price to rise in any lasting fashion above the psychologically important $50 per barrel mark given that the global environment is anything but straightforward at the moment, the disappointing Flash Purchasing Managers' Index in China is fuelling concerns about demand in the world's second largest consumer country. 

The latest hard figures also offer only limited grounds for relief here, admittedly, apparent oil demand in China totalled 10.3 million barrels per day in August, according to Bloomberg, which is somewhat higher than in the weak month of July, oil demand in these two months was on average just shy of 2.5% down in Q2, however. 

"China's lower (import) demand is also weighing heavily on coal prices, the front-month coal future on the ICE slid in mid-September to its lowest level since the 2009 financial crisis. Because there is no reduction in supply, the price remains low", says Commerzbank.