Crude oil retreats after weak China data; U.S. retail sales rise
Investing.com — Crude oil prices fell Tuesday as disappointing economic data raised further concerns about China’s economic recovery, even following Beijing’s unexpected interest rate cut.
By 09:40 ET (13.40 GMT), the U.S. crude futures traded 1.4% lower at $81.38 a barrel, while the Brent contract dropped 1% to $85.34 per barrel.
China's industrial output and retail sales data, released late Monday, showed that growth in the globe’s second-largest economy, and major oil importer, slowed further last month, and added a broad array of data highlighting intensifying pressure on the economy, mainly from the property sector.
The People’s Bank of China responded to these signs of a slowing recovery from its COVID hit by marginally cutting key interest rates on Tuesday.
However, the decision to cut key interest rates for the second time in three months has done little to improve the wider sentiment given China’s central bank reduced its one-year medium-term lending facility by just 15 basis points to 2.50% from 2.65%.
By contrast, U.S. retail sales jumped 0.7% last month, increasing more than expected in July, suggesting the U.S. economy continued to expand early in the third quarter and keeping a recession at bay.
Additionally, data for June was revised higher to show sales rising 0.3% instead of the previously reported 0.2%.
The Federal Reserve raised rates by 25 basis points last month and left the door open to another hike in September. While the U.S. central bank is widely expected to pause next month, these strong numbers can only add to the chances of policymakers calling for an additional interest rate increase, potentially hitting economic activity and thus the demand for crude.
These indications of relative U.S.
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