Oil prices pick up in global markets after initial dip

Oil prices have recovered slightly in global markets after they suffered losses as a result of renewed concerns over the slowing Chinese economy and its impact on crude demand.

During Tuesday trading, the price of US benchmark West Texas Intermediate for delivery in November shot up 52 cents to hit USD 44.95 a barrel compared with Monday's close.

Also, the price of Brent North Sea crude for November delivery increased 71 cents to stand at USD 48.05 a barrel in early London afternoon deals, AFP reported.

The new rise came after oil prices fell by more than a dollar on Monday following revelation of disappointing industrial sector data on China, the latest sign of weakness in the world's largest energy consumer.

The economic slowdown in China has hit demand for crude oil in global markets, lowering crude price.

Data released this week showed that profits at China's major industrial companies had fallen almost nine percent in August compared to the same period a year ago, indicating the biggest decline in the country’s economy since 2011.

Similar data released last week also showed that Chinese factory activity shrank at its fastest pace in six and a half years this month.

As demand for crude oil falls, the market is being rattled by the prospects of Iran exporting more crude after sanctions imposed on the country are removed following the recent nuclear agreement reached by Iran and the P5+1 group of countries – the US, the UK, France, China and Russia plus Germany – in the Austrian capital, Vienna, in mid-July.

Analysts say Iran can ramp up crude exports within months after the sanctions are lifted, adding more oil to an already oversupplied market.

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