Oil drops as China data weighs

FILE PHOTO – A pump crane surrounded by steam is seen during sunset at PetroChina’s oil field in Karamay, Xinjiang Uyghur Autonomous Region, January 5, 2011. REUTERS/Stringer

LONDON (Reuters) – Oil prices fell more than $4 a barrel on Monday amid concerns about demand as disappointing Chinese economic data revived fears of a global recession.

Brent crude futures fell $4.75, or 4.84 percent, to $93.40 a barrel by 1201 GMT, after settling down 1.5 percent on Friday.

US West Texas Intermediate crude fell $4.52, or 4.91%, to $87.57, after falling 2.4% in the previous session.

Open interest for Brent crude this month is down 20% from August last year.

“Open interest is still declining, with some (market players) not interested in touching it due to volatility. This is, in my view, the reason why volume has gone to the downside,” said Giovanni Stonovo, oil analyst at UBS. Weak Chinese data is a catalyst for the decline on Monday.

The central bank of China, the world’s largest importer of crude oil, cut lending rates to revive demand as data showed the economy slowed unexpectedly in July, with factory and retail activity slashing due to Beijing’s COVID-free policy and real estate crisis. Read more

Government data showed that refinery production in the country fell to 12.53 million barrels per day, the lowest level since March 2020. Read more

ING Bank cut its forecast for China’s GDP growth in 2022 to 4%, down from a previous forecast of 4.4%, warning that a further rating downgrade could be expected.

us dollar index,

Oil is generally priced in US dollars, so a strong dollar makes the commodity more expensive for holders of other currencies.

Talks to revive the 2015 Iran nuclear deal were also in focus on Monday. Analysts said oil supplies could rise if Iran and the United States accepted an offer from the European Union to lift sanctions on Iranian oil exports. Read more

Its foreign minister said that Iran would respond by midnight on Monday to the “final” EU draft text to save the 2015 nuclear deal, calling on the United States to show flexibility to resolve three remaining issues. Read more

(Reporting by Rowena Edwards) Additional reporting by Florence Tan in Singapore Editing by Jason Neely and David Goodman

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