2023-08-01 10:58:16
Oil prices dipped slightly on Tuesday following hitting a more than three-month high the previous day, weighed down by further negative economic data in China.
Around 10:30 a.m. GMT (12:30 p.m. in Paris), a barrel of Brent from the North Sea, for delivery in October, which is the first day of use as a benchmark contract, lost 0.60% to 84.92 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in September, dropped 0.71% to 81.22 dollars.
Manufacturing activity in China contracted in July for the first time in three months, weakened in particular by weak demand abroad for Chinese products, according to an independent index published on Tuesday.
The purchasing managers’ activity index (PMI), calculated by the firm S&P Global and the economic media Caixin thus follows the same trend as the official government figure.
This is a new element fueling fears of a more complicated economic recovery than expected following years of strict health restrictions to fight once morest Covid-19.
With China being the world’s largest importer of rough, the health of its economy is a major driver of demand.
The two crude benchmarks, however, remained close to their record prices in more than three months, reached the day before.
“Saudi Arabia’s production cuts continue to impact global oil supply,” said Ricardo Evangelista of ActivTrades.
“OPEC (Organization of the Petroleum Exporting Countries) production in July remained almost a million barrels per day below the agreed level, even taking into account the voluntary production cut of Saudi Arabia,” said Carsten Fritsch, analyst at Commerzbank.
The market is now waiting for the meeting of the joint ministerial monitoring committee (JMMC) of the group, scheduled for Friday.
The JMMC does not have decision-making power over an increase or reduction in the production quotas of the OPEC+ group (OPEC and its allies), but makes recommendations that serve as the basis for action taken during the organization’s ministerial meetings. . He may, however, convene a plenary meeting if he deems it necessary.
Main market concern: Saudi Arabia might especially announce the extension of its voluntary production cut of one million barrels per day during the meeting.
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