Oil falls as China data weighs

FILE PHOTO – A pump jack is seen surrounded by steam during sunset at a PetroChina oil field in Karamay, Xinjiang Uyghur Autonomous Region, January 5, 2011. REUTERS/Stringer

LONDON, Aug 15 (Reuters) – Oil prices fell more than $4 a barrel on Monday on demand fears, as disappointing economic data from China renewed concerns about a global recession.

Brent crude futures fell $4.75, or 4.84%, to $93.40 a barrel by 1201 GMT after being down 1.5% on Friday.

US West Texas Intermediate crude was down $4.52, or 4.91%, at $87.57 after falling 2.4% in the previous session.

Open interest on Brent crude this month is down 20% from August last year.

“Open interest continues to fall, with some (market players) not interested in touching it due to volatility. That is, in my opinion, the reason resulting in further downside volumes,” said the analyst at UBS oil, Giovanni Staunovo, adding that the trigger for Monday’s decline was weak data from China.

The central bank of China, the world’s biggest crude importer, cut lending rates to revive demand as data showed the economy unexpectedly slowed in July, with industrial and retail activity stifled by the Beijing’s zero COVID policy and a real estate crisis. read more

The country’s refinery output fell to 12.53 million barrels per day (bpd), its lowest level since March 2020, government data showed. read more

ING bank cut its forecast for China’s GDP growth in 2022 to 4%, down from an earlier projection of 4.4%, and warned that a further downgrade is possible.

The US Dollar Index,

The price of oil is usually expressed in US dollars, so a stronger dollar makes the commodity more expensive for holders of other currencies.

Talks to revive the 2015 Iran nuclear deal were also in the spotlight on Monday. Oil supply could increase if Iran and the United States accept an offer from the European Union, which would lift sanctions on Iranian oil exports, analysts said. read more

Iran will respond before midnight Monday to the European Union’s “final” draft text to salvage a 2015 nuclear deal, its foreign minister said, calling on the United States to show flexibility in resolving the three remaining issues. read more

Reporting by Rowena Edwards Additional reporting by Florence Tan in Singapore Editing by Jason Neely and David Goodman

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