Oil declines due to fears of China’s economic slowdown, OPEC production increases | Business and Economic News

As demand shrank for the first time in more than a year, China’s factory activity growth in July fell sharply.

Oil prices fell on Monday due to concerns about the Chinese economy. A previous survey showed that the growth of factory activity in the world’s second-largest oil consumer has fallen sharply, and the increase in oil production by the Organization of Petroleum Exporting Countries or OPEC producers has exacerbated this. Worry.

As of 04:55 GMT, Brent crude oil futures fell 76 cents, or 1%, to $74.65 per barrel, while US West Texas Intermediate (WTI) crude oil futures fell to an intraday low It fell 69 cents, or 0.9%, to US$73.26 per barrel and US$72.87 per barrel.

“China has been leading the recovery of the Asian economy, and if the correction intensifies, concerns about a sharp decline in the global outlook will intensify,” said Edward Moya, senior analyst at OANDA.

“The outlook for crude oil demand is unstable, and this situation may not improve until the global vaccination situation improves.”

A business survey on Monday showed that China’s factory activity growth fell sharply in July due to demand contracting for the first time in more than a year, partly due to high product prices, highlighting the challenges facing the world’s manufacturing center.

The results of the private survey were weak, mainly involving export-oriented and small manufacturers, and were broadly consistent with the official survey results released on Saturday, which showed that activity grew at the slowest rate in 17 months.

An investigation by Reuters found that the Organization of Petroleum Exporting Countries (OPEC)’s oil production in July also rose to its highest level since April 2020, which also suppressed prices because the organization further relaxed restrictions based on agreements with allies. Saudi Arabia, the largest exporter, has phased out voluntary production cuts.

Throughout the Asia-Pacific region, the highly contagious Delta variant that was first discovered in India continued to cause repercussions and cast a shadow over the future. Cases in China have increased slightly, Thailand will expand quasi-blockade measures, and the number of infections in the hot spot Sydney hit a record high.

Although global coronavirus cases continue to climb, analysts say that higher vaccination rates will limit the need to severely lock down demand during the peak of the pandemic last year.

The United States will not lock down again to contain COVID-19, but “things will get worse” because the Delta variant has contributed to a surge in cases, most of which are unvaccinated top US infectious disease expert Dr. Anthony Fauci, said on Sunday .

India’s daily gasoline consumption exceeded pre-pandemic levels last month as states eased COVID-19 lockdowns, while gas and oil sales were lower, indicating weak industrial activity in July.

The United States and the United Kingdom said on Sunday that they believed that Iran launched an attack on an Israeli-managed petroleum product tanker off the coast of Oman on Thursday, causing the deaths of a British and a Romanian, and pledged to work with partners to respond. The deadlock comes as the two countries are seeking to revive the nuclear agreement, which, if successful, may pave the way for the United States to end sanctions on Iran’s official oil flow.