Tuesday’s early trading saw a decline in oil prices ahead of a flurry of economic data coming out of China, which could shed light on the prospects for any revival in demand in the world’s top oil importer. American West Texas Intermediate crude fell 11 cents, or 0.13%, to $82.40 per barrel. At 00:15 GMT, …
Tuesday’s early trading saw a decline in oil prices ahead of a flurry of economic data coming out of China, which could shed light on the prospects for any revival in demand in the world’s top oil importer. American West Texas Intermediate crude fell 11 cents, or 0.13%, to $82.40 per barrel. At 00:15 GMT, the price of Brent crude futures had decreased by 8 cents to $86.13 a barrel.
Tuesday will see the release of China’s industrial production, investment, retail sales, and unemployment numbers for July after previous indications revealed that the world’s second-largest economy had entered a state of deflation and that trade had declined. The largest private real estate developer in China, Country Garden, is attempting to postpone payment on a private onshore bond for the first time, in the latest indication of a crippling liquidity shortage in the country’s real estate market. The People’s Bank of China reported on Friday that new bank loans fell in July and that other important credit gauges also declined. This is yet another alarming sign. “The upside for prices this year is probably capped, especially as shut-in OPEC output is unleashed and China’s economic recovery continues to sputter. Prices for oil may be approaching its ceiling, signaling the beginning of a new equilibrium,” according to a note from Eurasia Group.
According to a Reuters survey, China’s central bank is anticipated to hold the rates on its medium-term policy loans steady on Tuesday, despite recent indications that the economic recovery is losing steam. The rate was last cut by the People’s Bank of China in June, dropping by 10 basis points to 2.65%. The Organization of Petroleum Exporting Countries (OPEC) and its partners, known as OPEC+, are reducing production to drive up prices, but weak economic growth in China is offsetting the shortage of oil supply globally.
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