Oil prices down ahead of key economic data in China
Oil prices fell in early trade on Tuesday ahead of a slew of economic data from China which should provide clues on the outlook for any recovery in demand in the world's top oil importer. U.S. West Texas Intermediate crude was down 11 cents, or 0.13%, at $82.40 a barrel.
Brent crude futures lost 8 cents to trade at $86.13 per barrel at 0015 GMT. China is due to release industrial production, investment, retail sales and unemployment figures for July on Tuesday, after other indicators showed the world no.2 economy slipped into deflation and its trade slumped. In the latest sign of a stifling cash crunch in China's property sector, the largest private real estate developer Country Garden is seeking to delay payment on a private onshore bond for the first time.
In another worrying indicator, the People's Bank of China on Friday said new bank loans tumbled in July and other key credit gauges also weakened. «The upside for prices this year is likely to be capped, particularly as China's economic recovery continues to flag and shut-in OPEC production is released. Oil markets may be settling into a new equilibrium, with prices close to their ceiling,» Eurasia Group said in a note.
Despite fresh signs the economic recovery is losing momentum, China's central bank is expected to keep rates on its medium-term policy loans unchanged on Tuesday, according to a Reuters survey. The People's Bank of China last lowered the rate by 10 basis points to 2.65% in June. Weak economic performance in China is offseting tight global oil supplies as the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are cutting production to lift prices.
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