Oil prices fall due to concerns about China’s economy and increase in crude oil production Reuters

Jessica Jagannathan

SINGAPORE (Reuters)-Oil prices fell on Monday due to concerns about the Chinese economy. A previous survey showed that the growth of factory activity in the world’s second-largest oil consumer has fallen sharply, while the increase in oil production in OPEC oil-producing countries has intensified This worry.

At 0455 GMT, crude oil futures fell 76 cents, or 1%, to $74.65 per barrel, while U.S. West Texas Intermediate (WTI) crude oil futures fell 69 cents, or 0.9%, to 73.26 per barrel. The US dollar previously fell to an intraday low of US$72.87.

Edward Moya, senior analyst at OANDA, said: “China has been leading the recovery of the Asian economy. If the correction intensifies, concerns about a sharp decline in the global outlook will intensify.”

“The outlook for crude oil demand is unstable, and this situation may not improve until the global vaccination situation improves.”

A business survey on Monday showed that China’s factory activity growth fell sharply in July due to demand contracting for the first time in more than a year, partly due to high product prices, highlighting the challenges facing the world’s manufacturing center.

The weaker results of the private survey, which mainly involved export-oriented and small manufacturers, are broadly consistent with the official survey results released on Saturday, which showed that activity has grown at the slowest rate in 17 months.

A Reuters survey found that the Organization of Petroleum Exporting Countries (OPEC)’s oil production in July also rose to its highest level since April 2020, which also suppressed prices because the organization further eased the deal in accordance with agreements reached with allies. Production restriction measures, and Saudi Arabia, the largest exporter, has phased out voluntary production cuts.

Although global coronavirus cases continue to climb, analysts say that higher vaccination rates will limit the need to severely lock down demand during the peak of the pandemic last year.

The United States will not lock down again to contain COVID-19, but “things will get worse” because the Delta variant has contributed to a surge in cases, most of which are unvaccinated top US infectious disease expert Dr. Anthony Fauci, said on Sunday .

India’s daily gasoline consumption last month exceeded pre-pandemic levels as states eased COVID-19 blockades and gasoline sales were low, which indicated weak industrial activity in July.

The United States and the United Kingdom said on Sunday that they believed that Iran launched an attack on an Israeli-managed petroleum product tanker off the coast of Oman on Thursday, causing the deaths of a British and a Romanian, and pledged to work with partners to respond.