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Oil drops on record Russian output, weak China data

FXStreet (Mumbai) - Oil prices fell in European session as weak China data and record high production in Russia exacerbated the excess supply problem.

The Brent futures now trade 68 cents or 1.3% lower around USD 48.88/barrel. WTI oil futures trade 70 cents or 1.5% lower around USD 45.90/barrel.

China's factory activity fell for an eighth straight month in October, data released earlier today showed. However, oil prices managed to stay calm in Asia as the China data was slightly better than expected.

The futures ran into offers in Europe after Russia said that its October oil production hit a post-Soviet record of 10.78 million barrels per day. Moreover, the record high Russian output amid weakness in the world’s second largest economy means the excess supply situation is here to stay for a long time. Consequently, oil suffered losses.

Ahead in the day, the US ISM manufacturing PMI could offer insights into the health of the world’s largest economy.

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