Investing.com — The China bear is lurking again, and that isn’t helping the oil bull — at least not today.
Crude prices slid a day after hitting 2023 highs as data showed the Chinese consumer having slipped into deflation. Factory gate prices also extended declines in July in the No. 2 economy, raising concerns about fuel demand in a country that also happens to be the world’s biggest oil buyer.
“After an impressive couple of days of gains, crude prices are softening as energy traders await to see what happens with some of the supply side risks,” said Ed Moya, analyst at online trading platform OANDA.
OPEC, or the Organization of the Petroleum Exporting Countries, released an August outlook that was almost picture-perfect for the oil bull — projecting a rosy demand outlook through 2024 and super tight immediate supplies thanks to Saudi production cuts.
OPEC raised its 2024 global economic-growth forecast to 2.6% from 2.5%, while leaving 2024 world oil demand growth forecast unchanged at 2.25 million barrels per day.
“Clearly, if this is true, there’s no reason for the Saudis to continue reducing production at the pace they’ve been doing, let alone warn about deeper impending cuts,” said John Kilduff, partner at New York energy hedge fund Again Capital. “The Saudi actions clearly demonstrate their fear that global oil demand is not as hunky-dory as OPEC makes it out to be in its latest monthly report.”
Latest energy data from China showed crude oil imports fell 2.412M barrels per day month-on-month to a sixth-month low of 10.429M barrels daily as stockpiling wanes in the world’s largest oil importer.
The United States is also prohibiting some investment in China in sensitive technologies like computer chips and requires government notification in other tech sectors.
Meanwhile, India’s oil demand for July clocked in at 4.7M barrels daily, weaker than Wall Street’s expectations of 4.83M barrels per day. The country’s pace of year-on-year demand growth slowed from 190,000 barrels per day in June to 84,000 daily in July.
U.S. West Texas Intermediate, or , crude settled down $1.58, or 1.9%, at $82.82 per barrel — back to its closing price from six days ago. On Wednesday, WTI hit $84.64, its highest since November. Week-to-date, the U.S. crude benchmark was flat after a near 20% advance over six previous weeks.
settled down $1.15, or 1.3%, at $86.40, after an eight-month high of $87.63 from the previous session. Brent was up 0.2% on the week, after a 17% gain over the past six weeks.
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