Oil sinks amid China’s economic slowdown
Oil went down by more than 1% on Monday, dropping for a third session after official data revealed a sluggish Chinese economy. The official data showed a slowdown in China’s refining throughput and economic activity, indicating that the recent COVID-19 outbreaks are hindering the country’s economy.
Brent crude fell 1.1%, or 75 cents, to trade at $69.84 a barrel by 0445 GMT, while US oil likewise dropped 1.1%, or 76 cents, to trade at $67.68 a barrel.
Factory output and retail sales growth have suffered a major lag in July in China, missing expectations as the country’s business activity were disrupted by flooding and new outbreaks of the coronavirus.
China’s crude oil processing in the previous month also hit its lowest level on a daily basis since May 2020, as independent refiners decreased production amid tighter quotas, increased inventories, and declining profits. China is the top global importer of oil.
In other oil news, the International Energy Agency stated on Thursday that the rising demand for crude oil reversed course in July. The demand was expected to increase at a slower rate over the rest of 2021 amid the rising number of COVID-19 cases due to the more virulent Delta variant of the virus.