Oil Prices Crash Wednesday After Shortlived Gains
By Adedapo Adesanya
A $60 per barrel for Brent Crude on the global market this week was shortlived as oil prices fell sharply on Wednesday as weak economic data out of China and crude oil inventory gains in the United States’ spooked oil markets.
Business Post gathered that Brent Crude Oil fared poorly as it fell by 3.31 percent, equal to $2.03 to trade at $59.27 as at 9pm (Nigerian Time) after it fell by $2.96 per barrel (-4.83%) to below $60 again, at $58.34 by 5pm.
West Texas Intermediate (WTI) Crude also performed poorly as it lost 3.56 percent equivalent of $2.03 to trade at $55.07 after trading down -$3.07 (-5.38%) at $54.03 earlier in the day.
On Tuesday, the API reported a surprise crude oil inventory build of nearly 4 million barrels, unsettling markets that had seen huge gains on earlier news that the United States was pushing back tariffs for some of the items it was expected to go into effect in the beginning of September.
Then on Wednesday, grim economic data game in from China, which showed a sharp—and surprise—decline in industrial output growth to a 17-year low. Germany too reported weak economic data for Q2 as its exports slowed, hinting at a possible recession.
The final straw on Wednesday was the Energy Information Administration (EIA) report that backed up Tuesday’s API report of a build in US crude oil inventory.
Rising crude oil inventory, faltering demand growth, and fears that the China and US trade war will further depress China’s economy definitively tipped the scales into bear territory, with tensions in the Middle East over the Persian Gulf and Strait of Hormuz able to push up prices. poorly, with the global benchmark falling $2.96 per barrel (-4.83%) to below $60 again, at $58.34.