Crude futures settled lower Friday after bearish data from China lent negative sentiment to the oil complex, while ICE Brent's premium to NYMEX crude breached $20/barrel for the first time since mid-April.
NYMEX September crude settled 49 cents lower at $92.87/barrel and ICE September Brent settled 27 cents lower at $112.95/b. The European benchmark widened its premium to NYMEX crude to $20.08/b, up from $19.86/b Thursday and the first time it breached $20/b since April 10.
Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said the spread pushing the $20/b mark may have been "an exaggerated dip before the usual mean reversion takes place."
He added that the recent move appears more attributable to lower North Sea output due to seasonal field maintenance than any issues with WTI.
Gene McGillian, analyst at Tradition Energy, said $20/b appears to be the resistance point for the Brent/WTI spread, adding that in addition to tight supply in Brent due to maintenance next month at Buzzard -- the UK's largest oil field -- Brent futures were also getting a little more of a boost from geopolitical concerns.
The front-month Brent/WTI spread had been widening steadily since the middle of June, despite conjecture from analysts and pundits that the late May reversal of the Enbridge/Enterprise Partners Seaway Pipeline would narrow the differential.
Meanwhile, the oil complex overall retreated in early trade, which held throughout the session, on data showing exports from China collapsed in July and net imports of crude were the lower since December.
Analysts at Tradition Energy said in a note that exports of goods from China increased by just 1% versus expectations for a rise of 8%.
"That is the worst export growth since 2009," the analysts said. "Owing to recent patterns, such negative news should have prompted increased expectations of stimulus that would have been bullish for oil."
However, the steady stream of negative news out of China, as well as the US and Europe, become so great that it could be trumping stimulus-led expectations for growth, they noted.
The poor data on China was also bearish for equities, while the US dollar firmed against most currencies, weighing on crude futures.
In products, NYMEX September heating oil settled 2.45 cents lower at $3.0205/gal and September RBOB settled 31 points higher at $3.0039/gal.
An FCC at Valero's 190,000 b/d St. Charles, Louisiana, refinery was shut Friday for unplanned maintenance (See story, 1835 GMT). The unit expected to restart before the end of the month.
