2024-08-05 22:00:33
Oil prices fell to their lowest level in six months at the open on concerns about slowing economies in the United States and China, but losses slowed on Monday. North Sea Brent crude for September delivery fell 0.66% to $76.30, its lowest since early January. Its U.S. counterpart, West Texas Intermediate (WTI) for delivery in the same month, fell 0.78% to $72.94 a barrel shortly after hitting a six-month low.
“Fears of (global oil) demand destruction grow”PVM Energy analyst Tamas Varga commented that crude oil prices were under pressure amid risk aversion. These fears are so prevalent that “Supply risks related to heightened geopolitical tensions in the Middle East”John Plassard, an investment expert at Mirabaud, said that the US employment data for July released on Friday showed that the pace of US job creation slowed significantly and the unemployment rate rose.
China manufacturing activity falls in July
These numbers are added “Weak manufacturing data” John Prasad recalled that July. “Fears of a U.S. recession have revived (again)”DNB analysts stressed. Like the United States, China’s manufacturing activity also declined in July, falling to 49.8 points from 51.8 points in June. This is the first time since October 2023 that the Caixin PMI has fallen below 50, which means a decline in economic activity. As the world’s largest oil importer, the health of China’s economy has worried investors since growth slowed in the second quarter.
The Asian giant is facing an unprecedented crisis in its massive real estate sector, with continued weak consumption and high unemployment among young people. These data caused the black gold price to plummet by more than 2% in early trading, but in the second half of the session, it was weakened by the weak US service sector activity index (ISM), which started to grow again in July, better than market expectations. The index measuring this activity was 51.4% in July, compared to 48.8% a month ago. It is therefore back above the 50% mark, marking the resumption of expansion.
Geopolitical risks also tempered crude’s losses, as market watchers are closely watching Iran’s response to the assassination of Hamas political leader Ismail Haniyeh in Tehran. Investors are concerned that the conflict in Gaza could spread to neighboring countries, even if oil supplies have not yet been affected.
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