As economic data from China spurred fresh worries about a global economic slowdown that would sap oil demand, oil prices declined on Tuesday, extending losses from the previous session.
Brent crude futures were down 90 cents to $94.20 per barrel, losing roughly 1% by 00:03 GMT. WTI crude was down to $88.60 per barrel, losing 0.9%. Those losses were on top of the approximately 3% oil had lost in the previous session.
The primary driver of the fall was the disappointing data coming out of China, as factory and retail activity was stagnating, with manufacturing orders plummeting. In addition, China’s central bank unexpectedly cut rates in an attempt to stimulate demand, an unwelcome sign of governmental concern for the future.
It is expected there will be a rebound of China’s fuel-product exports in August, driving them to the highest for the year, after China issued more quotas in June and July. However shipments are expected to be capped by broader curbs, restricting them to seven year lows for 2022, according to analysts and traders.
US shale oil basins are expected to see total outputs rise to 9.049 million bod in September, marking the highest outputs since March of 2020, according to the Energy Information Agency’s productivity report on Monday.
Tuesday will see industry data on US crude stockpiles. A Reuters poll of experts found oil and gasoline stockpiles will likely have fallen, as distillate inventories will have risen.
Also on investor’s radars will be the talks to revive the 2015 Iran nuclear deal. If an offer from the European Union is accepted by the United States and Iran, it could remove sanctions on Iranian oil exports, according to analysts.
The fate of the deal is presently unclear. The European Union delivered a “final” draft text on Monday, but so far Iran’s response is unknown. The Iranian Foreign Minister had previously called on the United States to be more flexible regarding what he referred to as three key issues.
The Daily Financial Trends
