Oil down amid China’s sluggish recovery, OPEC+ supply boost
Oil dropped in Asia on Monday morning amid concerns over China’s slow economic recovery. China is the world’s second-largest oil consumer. Investors have also been looking ahead to the Organization of the Petroleum Exporting Countries and allies (OPEC+) boosting its oil production.
Brent oil futures went down 1.05% to $74.62 by 1:12 AM ET (5:12 AM GMT), and WTI futures took a 0.92% loss to trade at $73.27.
China’s Caixin manufacturing purchasing managers’ index (PMI) has revealed a lower-than-expected 50.3 for the month of July. The manufacturing and non-manufacturing PMIs, both released on Saturday, were 50.4 and 53.3, respectively.
An increase in the cost of raw materials and equipment maintenance, the recent floods, and the resurgence of COVID-19 cases have dealt a heavy blow on the country’s business activity, with China experiencing its slowest growth in almost one and a half years.
Going over to production, the OPEC+’s July output is reported to have reached its highest level since April 2020. The oil group will continue to ease existing production cuts from August 1st onwards, while Saudi Arabia ended its voluntary supply cut.