Oil Slumps as Virus, Chinese Economy Stoke Demand Fear
Oil slumps on Monday as a rapid invasion of delta variant and a sharp drop in Chinese economic activities stoke demand fear amidst turmoil in Afghanistan. Continue from last week, worries over the new COVID-19 cases are negatively affecting the world’s biggest economies which continues to threatening fuel demand.
The United States recent asked the Organisation of Petroleum Exporting Countries and allies (OPEC+) to raise output to reduce price uptrend in the oil market following inflation worries in America.
After the oil group resolved the impasse between its key members – Saudi Arabia and the United Arab Emirates over the production agreement from August, OPEC+ commenced implementation of additional 400,000 barrels per day in the month.
Crude oil prices slid on concerns coronavirus travel restrictions would hurt demand, particularly in China. The global benchmarks Brent Crude and US West Texas Intermediate down about 2%, after data showed a slowdown in China’s oil refining throughput.
Official data showed China’s industrial production and retail sales growth both slowed sharply in July as the world’s second-largest economy struggled with new COVID-19 outbreaks.
International benchmark Brent crude traded at $69.56 on Monday, posting a 1.5% fall from Friday when trade closed at $70.59 per barrel. American benchmark West Texas Intermediate (WTI) traded at $67.16 at the same time on Monday, decreasing by 1.54% relative to $68.21 a barrel on Friday.
Concern over the global fuel demand recovery from restrictive measures to combat the rising number of COVID-19 cases, especially in Asian countries, is continuing to push prices lower.
Globally, as of Aug. 13, 205,338,159 confirmed cases of COVID-19 with 662,383 new cases have been reported, according to data from the World Health Organization.
The US Energy Information Administration revised down global crude oil prices for 2021 and 2022 last week. Price gains were curtailed when the statistics agency cited concerns over future demand at the same time that OPEC+ producers are expected to pump more oil.
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Forecasts of an acceleration in US tight oil production also contributed to drag prices down.
China’s retail trade rose by 8.5% in July, slowing from 12.1% in June and missing guidance for an increase to 11.5%, according to data compiled by Trading Economics. The slowdown in growth is the lowest since December.
Oil Slumps as Virus, Chinese Economy Stoke Demand Fear
