Oil drops more than 1% as Chinese GDP shrinks demand hopes

London, July 17 (BNA): Oil prices fell by more than 1% today, Monday, after weaker-than-expected Chinese economic growth, which raised concerns about demand in the world’s second-largest oil consumer, while pressuring the partial restart of halted Libyan production. .

China’s gross domestic product grew 6.3% annually in the second quarter, compared to analysts’ expectations of 7.3%, with the post-pandemic recovery swinging quickly due to weak demand at home and abroad.

“Gross domestic product came in below expectations, so it won’t do much to ease concerns about the Chinese economy,” said Warren Patterson, head of commodity research at ING.

Brent crude fell $1.39, or 1.7%, to $78.48 a barrel by 1015 GMT, and US West Texas Intermediate crude fell $1.34, or 1.8%, to $74.08, the second consecutive day of losses for both contracts.

“China data has always looked hopeful; well, for the bulls anyway,” John Evans of oil brokerage PVM said in a report. “However, the contemporary economic backdrop of the Asia drive now appears to have moved away from the bears.”

Oil rose briefly after a news warning from Reuters about Saudi Arabia extending a voluntary production cut. The alert was withdrawn because it repeated an article it had published on June 4.

The two benchmarks achieved three weeks of gains and touched their highest levels since April last week, and found support from OPEC + production restrictions and unplanned outages in Libya and Nigeria.

Oil also came under pressure on Monday after production resumed at two of the three Libyan fields that were closed last week. Production was halted due to a protest against the kidnapping of the former finance minister.

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Two sources said on Friday that Russian oil exports from western ports are set to drop by between 100,000 and 200,000 barrels per day next month in another sign of tight supplies, in reference to Moscow’s commitment to its pledge to reduce supplies in conjunction with Saudi Arabia.

AN






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