Oil prices dip as markets weigh weak China PMIs, stimulus hopes

investing.com:

Investing.com — Oil prices fell slightly on Monday after weak business activity data from China pointed to worsening economic conditions in the world’s largest oil importer, although the prospect of more stimulus measures in the country kept losses limited.

Prices were sitting on five straight weeks of gains, and were also set for stellar gains in July as signs of tightening global supplies this year invited more long positioning in crude markets.

But this rally now appeared to be on hold, amid continued signs of weak economic conditions in China. Markets were also awaiting more cues on the U.S. economy from nonfarm payrolls data due later in the week.

Brent oil futures fell 0.3% to $84.14 a barrel, while West Texas Intermediate crude futures fell 0.3% to $80.35 a barrel by 22:258 ET (02:28 GMT).

Data on Monday showed that Chinese manufacturing activity shrank for a fourth straight month in July, while broader business activity also deteriorated as the country struggles with a slowing post-COVID economic recovery.

But concerns over the weak data were largely offset by expectations of more stimulus measures from the country, with media reports suggesting that officials are set to unveil more spending measures later on Monday.

Monday’s data furthered the case for more fiscal support for the economy, as it struggles with weak spending and slowing inflation.

While Chinese oil imports have remained close to record levels this year, fuel demand in the country has remained well below pre-COVID levels. Oil bulls are betting that more stimulus measures in the country will help improve fuel consumption.

Promises of more Chinese stimulus were also among the key factors behind an oil market rally over the past month, as the