Oil prices fell by more than 1%, during trading today, Monday, July 17 (2023), to continue bleeding losses for the second session in a row, amid fears of declining demand.
Chinese economic data showed slowing growth in the second quarter; What raised concern about demand in the world’s second largest oil consumer, with Libya resuming production from its largest oil field, which was halted by local protests.
Oil prices today
By 07:10 a.m. GMT (10:10 a.m. Mecca), benchmark Brent crude futures – for September delivery 2023 – were down 1.13%, at $78.97 a barrel.
US West Texas Intermediate crude futures – August 2023 delivery – fell by 1.15% to $75.55 a barrel, according to figures seen by the specialized energy platform.
And oil prices ended their dealings, on Friday, July 14, 2023, down by about 2%, for the first time in 4 sessions, but they achieved a third weekly gain for the first time since April.
During the past week, both benchmarks (Brent and West Texas Intermediate) achieved gains of about 1.8% and 2.1%, respectively.
Oil price analysis
Data released by the National Bureau of Statistics showed that China’s gross domestic product grew by only 0.8% in the April-June period compared to the previous quarter, with the recovery after the Corona epidemic faltering quickly due to weak demand at home and abroad.
“Gross domestic product came in below expectations, so it won’t do much to ease concerns about the Chinese economy,” said Warren Patterson, head of commodity research at ING.
The NBS data also showed that Chinese refineries processed crude 1.6% per day in June compared to May as they ramped up operations after spring maintenance, in line with strong imports by the world’s largest crude importer last month.
“Obviously, demand for oil grew at a strong pace year-on-year, but the market seems to be focusing on the headline figures represented in GDP,” Patterson added.
“Beijing is likely to be cautious in the timing of any new stimulus measures, for fear of pushing commodity prices higher,” said Stefano Grasso, portfolio manager at Vantage 8.
“They are hoarding crude oil at low prices, waiting for a recession to hit the West before they go full steam ahead with stimulus,” Grasso added, according to Reuters.
oil supplies
Oil prices fell after both benchmarks last week posted gains for the third week in a row and touched their highest levels since April, after production was shut down in Libya’s oil fields and Shell halted Nigerian crude exports, slashing supplies.
Four oil engineers and the Libyan Oil Ministry said that the Sharara and El Feel fields, with a total production capacity of 370,000 barrels per day, resumed on Saturday evening.
Field 108 remained closed, as production was halted in protest of the kidnapping of the former finance minister, according to data seen by the specialized energy platform.
Two sources said on Friday that oil exports from Russia’s western ports are set to decrease by about 100,000 to 200,000 barrels per day next month, in reference to Moscow’s fulfillment of its commitment to new supply cuts in conjunction with Saudi Arabia.
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