On Monday, Oil prices plummeted more than 3% as negative economic data from China and the United States. They are the world’s two largest Oil customers, combined with rising crude output from OPEC exporters fuelled fears of weakening demand and oversupply. Brent crude Oil futures fell $2.52, or 3.3 percent, to $72.89 a barrel, while WTI crude in the United States fell $2.69, or 3.6 percent, to $71.26 a barrel.
Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois, said, “Energy futures…are still expressing concerns over slowed production consumption as coronavirus cases are back on the rise in several regions of the U.S. as well as several countries overseas.” According to a survey released on Monday, China’s manufacturing activity growth slowed drastically in July as demand fell for the first time in more than a year.
The private poll’s weaker results, which largely covered export-oriented and small industries, were broadly in line with an official survey released on Saturday. China has been spearheading Asia’s economic recovery, and if the slump continues, fears that the global outlook would deteriorate will intensify. Manufacturing activity in the United States has also slowed. According to data from the Institute for Supply Management, growth slowed for the second month in a row as spending shifted back to services from products and raw material shortages persisted (ISM).
Last month, the ISM’s national manufacturing activity index fell to 59.5 from 60.6 in June, the lowest score since January. Oil output from the Organization of the Petroleum Exporting Countries (OPEC) increased in July to its highest level since April 2020, according to a Reuters survey. President Joe Biden’s senior medical adviser Anthony Fauci stated on Sunday that the US will not lock down again to combat COVID-19.