The drop in demand from China is also affecting market sentiment, which is also experiencing the end of the northern summer.
The prices of the oil Oil prices fell by more than $2 a barrel on Monday in anticipation of successful ceasefire talks in Gaza (Palestine) that would reduce supply risks in Middle Eastwhile the economic weakness of Chinathe largest importer of oil, threatened to curb demand.
Crude oil futures Brent closed at $77.66 a barrel, down $2.02, or 2.5%. West Texas Intermediate crude futures (WTI) of USA closed at $74.37 a barrel, down $2.28, or 3%. “This market is under pressure because of expectations that they will continue to press on with the cease-fire negotiations,” said Bob Yawger, director of energy futures at Mizuho in New York.
Both benchmarks fell nearly 2% on Friday as investors moderated their expectations for growth in the economy. Chinese demandbut ended the week virtually unchanged after US data showed that the inflation was moderating despite strong retail spending.
“Persistent concerns about slow demand in China led to a massive sell-off,” said Hiroyuki Kikukawa, president of NS Tradingadding that the impending end of the peak driving season in the United States due to the northern holidays was another factor influencing prices. However, supply risks arising from tensions in Middle East and the escalation of the war between Russia and Ukraine are propping up the market, he said.
Customs data from the weekend showed that exports of diesel and gasoline China’s crude oil output fell sharply in July, reflecting lower crude oil processing levels due to weak profit margins.
Thursday’s data also showed that the Chinese economy lost momentum in July, with new home prices falling at the fastest pace in nine years, industrial production slowing and the unemployment increasing.
This has fueled concerns among traders about a drop in demand from China, where refiners implemented sharp cuts in crude processing rates last month amid tepid fuel demand.
Meanwhile, the US Secretary of State, Antony Blinkenarrived at Tel Aviv on Sunday on another tour of the Middle East to promote a ceasefire in Gazabut Hamas raised doubts about the mission by accusing Israel to undermine their efforts.
Source: Ambito
