Crude oil prices fell last week after four weeks of gains as hopes for strong U.S. summer demand were dashed by concerns about demand in China. | Photo: Bloomberg
Oil held firm on Monday as downward pressure from a stronger US dollar and concerns about demand from top importer China offset support from strong demand elsewhere and OPEC+ supply cuts.
The dollar strengthened as trading on a Donald Trump victory in the upcoming US election gained momentum after an attempted assassination of the former US president. A stronger dollar makes oil more expensive for buyers with other currencies and generally weighs on oil prices.
Brent crude futures rose 8 cents, or 0.1 percent, to $85.11 a barrel by 1000 GMT. U.S. West Texas Intermediate crude rose 19 cents, or 0.2 percent, to $82.40.
“Chinese data, including refinery runs and crude imports, are not supportive,” said UBS analyst Giovanni Staunovo. “But demand growth elsewhere is still healthy.”
Crude oil prices fell last week after four weeks of gains as hopes for strong U.S. demand in the summer were dashed by concerns about demand in China.
Chinese data on Monday reinforced those concerns. The world’s second-largest economy grew 4.7 percent in the April-June quarter, official figures showed, the slowest expansion since the first quarter of 2023.
Separate figures on Friday showed that China’s crude oil imports fell 2.3 percent in the first half of this year.
However, the volatile situation in the Middle East continues to create a geopolitical premium for oil, although ample spare capacity from Saudi Arabia and other OPEC members keeps price support limited, analysts say.
The oil market is also largely supported by supply cuts from the OPEC+ producer group. Iraq’s oil ministry said over the weekend that it will offset overproduction from early 2024.
“While fundamentals remain supportive, there are growing concerns about demand, much of which stems from China,” said ING analysts led by Warren Patterson.
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First print: Jul 15, 2024 | 5:06 PM IST