2023-08-08 09:48:33
Crude prices lost ground on Tuesday, weighed down by investor risk aversion and worries regarding Chinese demand following the release of disappointing trade data in the country.
Around 09:15 GMT (11:15 a.m. in Paris), a barrel of Brent from the North Sea, for delivery in October, lost 1.28% to 84.25 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in September, dropped 1.22% to 80.94 dollars.
Oil prices faltered “due to weak Chinese trade data”, commented DNB analysts.
China’s exports slumped in July to experience their steepest decline in more than three years, penalized by sluggish demand abroad and the economic slowdown in the country, which are weakening thousands of companies.
“As the Chinese economy slows, traders are lowering their forecasts for global oil demand, which is translating into lower prices,” said Ricardo Evangelista, analyst at ActivTrades.
DNB analysts further note “a significant drop in crude oil imports (from China, editor’s note) on a monthly basis”.
The Chinese trade data also triggered renewed concerns regarding the health of the global economy and thus risk aversion among investors, who are moving away from more volatile assets like oil and into safe havens. like the dollar.
However, the price of black gold being denominated in greenback, an appreciation of the American currency discourages oil purchases, while a weaker dollar strengthens demand.
The losses of the crude were however limited “by the tightening of the offer resulting from the reductions of production of Russia and Saudi Arabia”, tempers Mr. Evangelista.
Last week, Saudi Arabia announced the extension of its voluntary production cuts of one million barrels per day for another month. Russia followed suit, announcing a reduction in its oil exports of 300,000 barrels per day for September.
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