Oil falls as China data weighs

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

LONDON, Aug 15 (Reuters) – Oil prices fell by more than $4 a barrel on Monday on demand fears as disappointing Chinese economic data renewed worries about a global recession.

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

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

Open interest on Brent oil this month is down 20% from August last year.

“Open interest is still falling, with some (market participants) not interested in touching it due to volatility. That is, in my view, the reason resulting in higher volumes to the downside,” UBS oil analyst Giovanni Staunovo said, adding that the trigger for Monday’s drop was weak Chinese data.

The central bank of China, the world’s biggest crude importer, cut lending rates to revive demand as data showed the economy slowed unexpectedly in July, with factory and retail activity pressured by Beijing’s zero-covid-19 policy and a property crisis. read more

The country’s refinery output fell to 12.53 million barrels per day (bpd), the lowest since March 2020, government data showed. read more

ING bank cut its forecast for China’s GDP growth in 2022 to 4%, down from a previous forecast of 4.4%, and warns that a further downgrade is possible.

The US dollar index,

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

Talks to revive the nuclear deal with Iran from 2015 were also in focus on Monday. Oil supplies could increase if Iran and the United States accept an offer from the European Union, which would lift sanctions on Iranian oil exports, analysts said. read more

Iran will respond by midnight Monday to the European Union’s “final” draft text to save a 2015 nuclear deal, the country’s foreign minister said, 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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