Oil down nearly 2% — again — as rally disrupted by China gloom
Investing.com — Just when OPEC thought it had it all, it appears it didn’t.
Crude prices were down 2% for a second session in a row Monday after China’s economic growth again lagged expectations, raising questions on whether demand for oil will actually hit record highs this year if the top importer of the commodity remains in its current flux.
A partial restart of halted Libyan output also added to the dour mood among crude longs, Reuters reported.
New York-based West Texas Intermediate, or WTI, crude settled down $1.27, or 1.7%, at $74.15 per barrel for its weakest closing price since July 10.
London-based Brent settled down $1.37, or 1.7%, at $78.50, also for its poorest finish in a week.
Prior to this week, oil markets had been riding a bullish wave on the back of a dollar that sank to 15-month lows after U.S. interest rate expectations were softened by a retreat in inflation. Non-stop rhetoric — more than proof — of the Saudis doubling down on production cuts, supposedly with Russian assistance this time, put more wind in the sails of crude longs.
Friday was the first time the party came to a meaningful halt, as crude prices dropped some 2% after some players took profit on an 8% advance over the past three weeks. There was also talk that China’s second-quarter gross domestic product data, due Monday, would be unsupportive to oil’s winning streak.
That data showed Chinese GDP growth didn’t just contract from the first quarter but also grew at a slower-than-expected pace from the prior year, as its biggest drivers — manufacturing and real estate activity — remained under pressure.
“Oil won’t catch a bid unless China finally unleashes [a] meaningful stimulus that propels large parts of the economy,” said Ed Moya,
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