Crude Oil Prices Down on Chinese Economic Figures

By Adedapo Adesanya

Crude oil prices went down by more than 1 per cent on Monday after weaker-than-expected Chinese economic growth raised doubts over the strength of demand in the world’s second-biggest oil consumer.

Brent crude lost 1.7 per cent or $1.37 to trade at $78.50 a barrel, and the US West Texas Intermediate (WTI) crude fell by 1.7 per cent or $1.27 to finish at $74.15 per barrel.

China’s gross domestic product (GDP) grew by 6.3 per cent year-on-year in the second quarter, slightly lower than the 7.3 per cent projected by some analysts, indicating that its post-pandemic growth had lost momentum.

The latest data raises the risk of China missing its modest 5 per cent growth target for 2023, just as more timely June data, which was released alongside the GDP numbers, showed China’s retail sales grew 3.1 per cent, slowing sharply from a 12.7 per cent jump in May.

Industrial output growth unexpectedly quickened to 4.4 per cent last month from 3.5 per cent in May, but demand worries remain.

Oil also came under pressure on Monday from the resumption of output at two of three Libyan fields that shut last week. Output had been halted by a protest against the abduction of a former finance minister, Mr Faraj Bumatari.

Production at Libya’s Sharara and El Feel oilfields, which were shut on Thursday following the abduction of the former finance minister, was resumed after it was confirmed that the minister, who was kidnapped after arriving at Mitiga airport on Tuesday, had been released.

Sharara and El Feel oilfields, as well as the 108 fields, were all closed in a protest by the al-Zawi tribe in response to the kidnapping of the former finance minister. The 108 oilfield remains shut.

Support came as projections showed that Russian oil exports from western ports are set to fall by 100,000-200,000 barrels per day in August, a sign that the producer is making good on a pledge for supply cuts in tandem with Saudi Arabia.

Also, the US Energy Information Administration (EIA) reported that US shale oil production is set to fall to nearly 9.40 million barrels per day in August, the first monthly decline since December 2022.