Oil prices dropped by around 2% on Monday, falling for a third session post official data implied that refining throughput and financial activity in China signals that COVID-19 outbreaks are creasing the world’s second-largest economy.
Brent crude fell by 1.7% or USD1.22 to settle at USD69.37 per barrel. U.S. oil prices fell by 2% or USD1.35 to settle at USD67.09 per barrel. Data showed that Chinese retail sales and factory output slowed stridently in July, missing expectations as fresh outbreaks of COVID-19 and flooding disturbed business activity. Last month, China’s crude oil processing also dropped to the least level on an everyday basis since May 2020, sovereign refiners sliced production in the face of stretched quotas, falling profits, and augmented inventories. China is currently the world’s largest oil importer.
Commerzbank said in a statement that tensions regarding the spread of the Delta variant across the nation and the effects it is likely to have on oil Demand are persisting in pondering on prices. According to a survey, uncertainties regarding the pace of economic revival were also elevated post-U.S. consumer sentiment fell stridently at the beginning of August to its minimum in a decade.
Last week the IEA said that increasing Demand for crude oil overturned track in July and was anticipated to boost at a slower rate over the rest of the year as increasing COVID-19 infections from the new Delta variant. On Friday, the U.S. Commodity Futures Trading Commission said that money managers declined their options holdings and net-long U.S. crude futures in the week to Aug. 10. It further added that Speculators also slashed their options positions and futures in London and New York by 21,777 contracts to 283,601 over the period.