Crude oil futures fell sharply on Monday following falling for two straight months in July as fears of a recession weighed on commodity prices.
energy commodity prices
- Delivered in September WTI CrudeFutures fell $4.73, or 4.8 percent, to settle at $93.89 a barrel.
- Delivered in October Brent CrudeFutures fell $3.94, or 3.8 percent, to settle at $100.03 a barrel.
- Gasoline futures for September delivery fell 3.7% to settle at $2.998 a gallon.
- Delivered in SeptemberThermal Fuel FuturesPrices fell 3.1 percent to settle at $3.44 a gallon.
- Natural gas futures for September delivery fell 0.7% to settle at $8.283 per million Btu.
market driving force
Brian Swan, senior commodities analyst at Schneider Electric, said WTI crude oil prices were near a previous low of around $93 a barrel, which might be tested once more this week as there is strong selling interest in the market. Due to recession fears and news of increased Libyan oil production,WTI CrudePrices are stagnant.
“Another source of near-term price pressure is that weak manufacturing data from China is weighing on demand,” he wrote.
Manufacturing activity in China unexpectedly shrank in July as Chinese authorities imposed virus restrictions and weak demand made hopes for a strong economic recovery dimmer.
China’s National Bureau of Statistics said on Sunday that the manufacturing purchasing managers’ index (PMI) fell to 49.0 in July from 50.2 the previous month, falling below 50, the watershed mark for industrial expansion or contraction, and well below the economics survey by the Wall Street Journal. The median estimate was 50.3.
The ISM report noted that its closely watched manufacturing index fell to 52.8% in July from 53% the previous month, also falling short of the 52.1% expected by economists polled by The Wall Street Journal. While the figure is still above 50% of a symbolic growth, it is the lowest level since June 2020.
Oil traders also focused on Wednesday’s scheduled meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.
“Since previous agreements have expired and OPEC+ has theoretically withdrawn the production cuts that were previously reduced due to the pandemic, attention will now turn to how OPEC+ plans to actually achieve those goals and whether it will announce further future Increase production,” OANDA senior market strategist Craig Erlam wrote in a Monday note.
Disappointing economic data from China and other Asian economies also weighed on oil prices, dampening hopes for a rebound.
The Markit-Caixin Purchasing Managers’ Index, a monthly indicator of business conditions in China’s manufacturing sector late Sunday, came in at 50.4, missing expectations and the consensus estimate of 51.5, according to FactSet data.
