The Asian giant’s GDP registered year-on-year growth of 6.3% in the second quarter, a figure lower than the forecasts of analysts who expected an expansion of 7.3%.
Amidst the fluctuations of oil market, this Monday, July 17, crude oil presents a drop of more than 1% in its price. This situation was triggered due to lower economic growth in China than expectedwhich raised concerns on demand In a second world’s largest consumer of crude oil. In addition, the partial resumption of Libyan production exerted pressure additional on prices.
He Gross domestic product (GDP) of China registered year-on-year growth of 6.3% in the second quarter, lower than analyst forecasts who expected an expansion of 7.3%. The long-awaited economic recovery of the country, after the ravages of the pandemic, quickly came under threat due to weakening demand both domestically and abroad.
In this scenario, Brent crude oil falls by 1.5%, equivalent to US$1.39, reaching a price of US$78.48 per barrel. For its part, US crude West Texas Intermediate it falls 1.4%, representing a decrease of US$1.34 and standing at US$74.08. This marked the second day in a row of losses for both contracts.
John Evans, an expert at the PVM oil brokerage, expressed his perspective on the situation in a report, mentioning that data coming from China has always raised hopes, at least for optimistic investors. However, in the current economic climate, Asian engine seems to be leaning towards the downtrendgenerating an unfavorable background for the oil market.
Oil: price estimates
It is important to note that oil experienced a brief spike due to a Reuters alert about a possible extension of voluntary cuts of production by Saudi Arabia. However, this alert was later withdrawn, as it simply repeated news previously published on June 4.
During the last three weeks, oil prices had been on the rise, reaching its highest level since April. This increase was supported by OPEC+ production cuts and unexpected disruptions in Libya and Nigeria.
However, oil production came under pressure again on Monday due to the resumption of production in two of the three Libyan fields They had been closed the week before. The production stoppage was due to a protest in response to the kidnapping of a former finance minister.
As a sign of shortage of supply, a reduction in Russian oil exports from western ports is expected. As reported by two sources on Friday, a decrease of between 100,000 and 200,000 barrels per day is estimated for next month. This indicates that Moscow is making good on its promise to cut supply, in line with Saudi Arabia.
In conclusion, the Oil market faces turbulence caused by slower economic growth in China and the resumption of production in Libya. These factors have exerted pressure on crude oil prices, which, after a period of sustained increases, have experienced losses in recent days. Uncertainty and unforeseen events in the oil industry continue to be determining factors in the evolution of this crucial market for the global economy.
Source: Ambito
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