LONDON, Aug 15 (Globe Live Media) – Oil prices fell more than $4 a barrel on Monday on demand fears, after disappointing economic data from China renewed concerns of a global recession.
* Brent crude futures were down $4.75, or 4.84%, at $93.40 a barrel by 1201 GMT after falling 1.5 percent on Friday. US West Texas Intermediate futures were down $4.52, or 4.91%, at $87.57 a barrel, 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 higher volumes to the downside,” said the oil analyst of UBS, 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, at a time when data showed the economy unexpectedly slowed in July, with industrial activity and retailer held back by Beijing’s zero COVID policy and a real estate crisis.
* The country’s refinery output fell to 12.53 million barrels per day (bpd), its lowest level since March 2020, according to government data.
* ING bank cut its forecast for China’s GDP growth in 2022 to 4%, down from a previous projection of 4.4%, and warned that a further downgrade is possible.
* Meanwhile, the US dollar index rose to near the middle of its range this month.
* Oil is generally priced in dollars, so a stronger US currency makes the product 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 remove sanctions on Iranian oil exports, analysts said.