Key points
- WTI Crude extends losses from last Friday
- Weaker-than-expected Chinese GDP fuels demand worries amid sluggish recovery
- Output resumption at two key Libyan oilfields adds to pressure
Futures on US West Texas Intermediate Crude Oil retreated for a second straight day on Monday, after disappointing Chinese economic growth data raised concerns about demand in one of the major oil-consuming nations worldwide.
China’s economy expanded at an annualized rate of 6.3% during the second quarter, data showed, while being well short of market consensus of a 7.3% growth. The numbers implied China’s post-COVID economic recovery was losing momentum amid weakening demand.
“China data was always looked forward to with a degree of hope; well, for bulls anyway,” John Evans of broker PVM was quoted as saying by Reuters.
“However, the contemporary economic backdrop for Asia’s driver seems to now be wheeled out for the bears.”
Additional downside pressure for the market came after media reports that oil production at two of the three Libyan fields had been resumed. Production at Libya’s Sharara and El Feel oilfields had been halted by a protest by al-Zawi tribe against the abduction of former finance minister Faraj Bumatari.
As of 12:14 GMT on Monday WTI Crude Oil Futures for September delivery were losing 1.34% to trade at $74.31 per barrel.
At the same time, Brent Oil Futures for September delivery were losing 1.34% on the day to trade at $78.80 per barrel.
Last week, both contracts touched their highest price levels since April, underpinned by OPEC+ production cuts and unplanned outages in Libya and Nigeria.
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