Oil drops as China data weighs

FILE PHOTO – A pump jack is seen surrounded by steam during sunset at a PetroChina oil field in Karamay, Xinjiang, Uyghur Autonomous Region, Jan. 5, 2011. REUTERS/Stringer

LONDON, Aug. 15 (Reuters) – Oil prices fell more than $4 a barrel Monday on demand fears as disappointing Chinese economic data renewed concerns about the global recession.

Brent crude futures fell $4.75, or 4.84%, to $93.40 a barrel at 1201 GMT after falling 1.5% on Friday.

US West Texas Intermediate crude fell $4.52 or 4.91% to $87.57 after falling 2.4% in the previous session.

The interest rate on Brent oil this month is 20% lower than in August last year.

“Open interest is still falling, with some (market players) not interested in touching it due to volatility. That, in my opinion, is the reason resulting in higher volumes down,” said UBS oil analyst Giovanni Staunovo, adding that the trigger for Monday’s decline was weak Chinese data.

The central bank in China, the world’s largest crude oil importer, cut interest rates to boost demand as data showed the economy slowing unexpectedly in July, with factory and retail activity under pressure from the zero-COVID Beijing policy and a real estate crisis. read more

The country’s refinery output fell to 12.53 million barrels per day (bpd), the lowest level since March 2020, government data shows. read more

ING bank lowered its forecast for China’s GDP growth in 2022 to 4%, down from a previous projection of 4.4%, warning that further cuts are possible.

the US dollar index,

Oil is generally priced in US dollars, so a stronger dollar makes the commodity more expensive for holders of other currencies.

Monday also centered on talks to revive the 2015 nuclear deal with Iran. Oil supplies could soar if Iran and the United States accept an offer from the European Union that would lift sanctions on Iran’s oil exports, analysts said. read more

Iran will respond at midnight Monday to the European Union’s “final” draft to salvage a 2015 nuclear deal, the foreign minister said, calling on the United States to show flexibility to deal with three outstanding issues to solve. read more

Reporting by Rowena Edwards Additional reporting by Florence Tan in Singapore Editing by Jason Neely and David Goodman

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